What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-21 compared with 2022-08-22 · 297 added, 200 removed, 134 unchanged (79% of the section changed)

55 unchanged sentences

made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

As used in this Quarterly Report on Form 10-Q

and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our” refer to Vivakor,

Inc., its wholly owned and majority-owned active subsidiaries, or joint ventures (collectively, the “Company”).

balances and transactions between consolidated entities are eliminated.

Vivakor has the following wholly and majority-owned subsidiaries:

Vivaventures Management Company, Inc., Vivaventures Energy Group, Inc.

(99%), Vivaventures Oil Sands, Inc., Vivasphere, Inc., and Vivakor

Middle East, LLC (49%, consolidated).

Vivakor manages and consolidates RPC Design and Manufacturing LLC, which includes a noncontrolling

interest investment from Vivaopportunity Fund, LLC, which is also managed by Vivaventures Management Company, Inc.

Vivakor has common

officers with and consolidates Viva Wealth Fund I, LLC.

As used in this Quarterly

Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our”

refer to Vivakor, Inc., its wholly owned and majority-owned active subsidiaries, or joint ventures (collectively, the “Company”).

Intercompany balances and transactions between consolidated entities are eliminated.

Vivakor has the following wholly and majority-owned

subsidiaries:

Silver Fuels Delhi, LLC (since August 1, 2022), White Claw Colorado City, LLC (since August 1, 2022), Vivaventures Remediation

Corporation, a Texas corporation, Vivaventures Management Company, Inc., Vivaventures Energy Group, Inc.

(99%), Vivaventures Oil Sands,

Inc., Vivasphere, Inc., and Vivakor Middle East, LLC (49%, consolidated).

Vivakor manages and consolidates RPC Design and Manufacturing

LLC, which includes a noncontrolling interest investment from Vivaopportunity Fund, LLC, which is also managed by Vivaventures Management

Company, Inc.

Vivakor has common officers with and consolidates Viva Wealth Fund I, LLC.

Business Overview

Vivakor, Inc.

is a socially responsible operator,

acquirer and developer of clean energy technologies and environmental solutions, primarily focused on soil remediation.

We specialize

in the remediation of soil and the extraction of hydrocarbons, such as oil, from properties contaminated by or laden with heavy crude

oil and other hydrocarbon-based substances.

We are focused on the remediation of contaminated

soil and water resulting from either man-made spills or naturally occurring deposits of oil.

Our primary focus has been the remediation

of oil spills resulting from the Iraqi invasion of Kuwait and naturally occurring oil sands deposits in the Uinta basin located in Eastern

We plan to expand into other markets, both domestically and globally, where we believe our technology and services will provide

a distinct competitive advantage over our competition.

We are a socially responsible operator, acquirer and developer of clean

energy technologies and environmental solutions.

Our current efforts are primarily focused on soil remediation and owning and operating

crude oil gathering, storage and transportation facilities.

The soil remediation segment of our business specializes in the remediation

of soil and the extraction of hydrocarbons, such as oil, from properties contaminated by or laden with heavy crude oil and other hydrocarbon-based

Our patented process allows us to successfully recover the hydrocarbons which we believe could then be used to produce asphaltic

cement and/or other petroleum-based products.

We are focused on the remediation of contaminated soil and water resulting

from either man-made spills or naturally occurring deposits of oil.

Our primary focus has been the remediation of oil spills resulting

from the Iraqi invasion of Kuwait and naturally occurring oil sands deposits in the Uinta basin located in Eastern Utah.

We may expand

into other markets, both in Utah and globally, where we believe our technology and services will provide a distinct competitive advantage

over our competition.

Our current focus is on the clean-up of greater than 7% hydrocarbon

contaminated soil located in Kuwait as a result of the Iraqi invasion, and naturally occurring oil sands deposits in Utah.

We have deployed

two RPC units to date including one unit to Kuwait (for which operations were temporarily suspended due to COVID-19) and another to Vernal,

Utah (which is presently operating).

The crude oil gathering, storage and transportation

segment of our business focuses on owning and operating crude oil gathering, storage and transportation facilities.

One of our facilities

sells crude oil in amounts up to 60,000 barrels per month under agreements with a large energy company.

A different facility operates

a 120,000 barrel crude oil storage tank near Colorado City, Texas.

The storage tank is presently connected to the Lotus pipeline system

and we plan to further connect the tank to major pipeline systems.

Recent Developments

Off-Take Agreement

On April 26, 2022, our subsidiary Vivaventures Energy Group, Inc., entered into a Product Off-Take Agreement (the “Off-Take Agreement”), with

Hot Oil Transport, LLC, a Nevada limited liability company (“HOT”).

Pursuant to the Off-Take Agreement, the Company plans

to produce asphalt that meets the specifications for PG 64-22 grade, as set forth by the Nevada Department of Transportation and the American

Association of State Highway and Transportation Officials (the “Product”) from a to-be-scaled processing plant to be located

in Uintah County, Utah, and as may be relocated from time to time by the Company (the “Plant”).

HOT will be obligated to purchase

from the Company certain quantities of the Product from the Plant once the Plant begins to produce the Product, on the terms and conditions

set forth in the Off-Take Agreement.

The quantity of the Product

to be sold and purchased pursuant to this Agreement will be (i) 1,000 tons of the Product per week, or (ii) the entirety of any lesser

amount that may be produced by the Company during any given week.

HOT will 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 upon the same terms and conditions, except

that the purchase price shall be at market rate as determined in the Company’s sole discretion.

Pursuant to the Off-Take

Agreement, the rates for the sale and purchase of up to 1,000 tons of Product per week will be determined on the basis of an average 1,000

tons per week, a price per ton using the “Argus Rockies Rail Low” price for asphalt in the Rocky Mountain region as set forth

in the most recent edition of Argus Americas Asphalt report, produced by Argus Media Group, as of the date of delivery

(the “Unit Price”).

Once calculated, the weekly purchase price will be reduced by $1,500 in order to compensate Buyer for

costs associated with testing, providing storage tanks for Buyer’s minimum quantity purchases, and certifying the quality of the

Product, for so long as Buyer is providing the testing facilities for the Product.

As noted above, the purchase price for any Product

over 1,000 tons per week will be at market rate, as determined by the Company.

In the event the Unit Price drops below $250, the Company

will have the right to suspend production of the Product upon written notice to HOT.

The Off-Take Agreement

provides for an initial term of ten years.

The Off-Take Agreement will automatically renew for two successive ten-year terms, subject

to the Company’s right to continue operating at the current Plant site, unless either party terminates the Off-Take Agreement by

written notice to the other party not less than three months prior to the expiration of the term.

During a term, the Off-Take Agreement

can only be terminated for (i) abandonment or termination of Project by the Company;

On April 26, 2022, our

subsidiary Vivaventures Energy Group, Inc., entered into a Product Off-Take Agreement (the “Off-Take Agreement”), with Hot

Oil Transport, LLC, a Nevada limited liability company (“HOT”).

Pursuant to the Off-Take Agreement, the Company plans to produce

asphalt that meets certain specifications from its Vernal, Utah RPC plant.

HOT will be obligated to purchase from the Company certain

quantities of the product from the plant once the plant begins to produce the product, on the terms and conditions set forth in the Off-Take

The quantity of the product to be sold and purchased pursuant to this Agreement will be (i) 1,000 tons of the product per week,

or (ii) the entirety of any lesser amount that may be produced by the Company during any given week.

The Off-Take Agreement, sets for

forth the rates for the sale and purchase of up to 1,000 tons of product per week.

The Off-Take Agreement provides for an initial term

of ten years.

The Off-Take Agreement will automatically renew for two successive ten-year terms, subject to the Company’s right

to continue operating at the current Plant site, unless either party terminates the Off-Take Agreement by written notice to the other

party not less than three months prior to the expiration of the term.

During a term, the Off-Take Agreement can only be terminated for

(i) abandonment or termination of Project by the Company;

(ii) default by the other party;

or (iii) in connection

with occurrence of a force majeure.

or (iii) in connection with occurrence of a

force majeure.

Currently the operations

at our vernal plant are limited due to recent, temporary supply and personnel limitations.

We are not currently producing product toward

the Off-Take Agreement due to these recent developments.

We anticipate that these limitations may be resolved prior to January 31, 2023.

Membership Interest

3 unchanged sentences

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,

at closing, which occurred on August 1, 2022, 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 Company.

The purchase price for

the Membership Interests is approximately $37.4 million, subject to post-closing adjustments, payable by the Company in a combination

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, at closing, which occurred on August 1, 2022, 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 Company.

price for the Membership Interests is approximately $32.9 million, after post-closing adjustments, paid for by the Company with a combination

of 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, secured three-year promissory notes made by the Company in favor of the Sellers, in the form

of Exhibit 4.1 The purchase price is subject to certain assumptions and adjustments set forth in the MIPA.

The MIPA is also subject to

unwinding in the event of a breach of a material term of the MIPA, as set forth in the MIPA.

common stock immediately prior to issuance, secured three-year promissory notes made by the Company in favor of the Sellers.

is also subject to unwinding in the event of a breach of a material term of the MIPA, as set forth in the MIPA.

The MIPA contains customary

2 unchanged sentences

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 beginning, assuming a closing under the MIPA after July 1, 2022, on August 20, 2022, and continuing

thereafter on the twentieth (20 th ) calendar day of each calendar month thereafter, as set forth in the MIPA.

equal to the Monthly Free Cash Flow beginning on August 20, 2022, and continuing thereafter on the twentieth (20 th ) calendar

day of each calendar month thereafter, as set forth in the MIPA.

Without in any way limiting

7 unchanged sentences

and the payment of any and all other obligations owed to the Sellers by the Company under the Notes or thereunder are guaranteed solely

by, and to the extent set forth in, the Guaranty Agreements, in the form of Exhibit 10.4 hereto, between each of the Sellers and SFD and

SFD owns and operates

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

by, and to the extent set forth in, the Guaranty Agreements, between each of the Sellers and SFD and WCCC.

SFD operates a crude

oil gathering, storage, and transportation facility located on approximately 9.3 acres near Delhi, Louisiana.

Under existing agreements,

a subsidiary of a large NYSE traded energy company (the “Purchaser”) 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.

Additionally, for a period of 10 years, SFD is, under existing crude oil supply agreements with WC Crude, guaranteed

a minimum gross margin of $5.00 per barrel on all quantities of blended crude oil sold thereunder.

At present, SFD is blending and selling

approximately 1,400 to 1,700 barrels of blended crude oil on a daily basis.

Additionally, the acquisition of SFD would provide the Company

with the infrastructure needed to place a Remediation Processing Machine (“RPC”) to clean soil which has been contaminated

by hydrocarbons as well as tank bottom sludge.

Management believes SFD’s location in the heart of the Smackover formation would

provide the Company with access to significant amounts of tank bottom sludge and contaminated soil.

WCCC owns a 120,000 barrel

crude oil storage tank, in the heart of the Permian Basin, located near Colorado City, Texas.

a subsidiary of a large NYSE traded energy company (the “Purchaser”) is obligated to purchase 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.

Additionally, for a period of 10 years, SFD is, under existing crude oil supply agreements with WC Crude, guaranteed a

minimum gross margin of $5.00 per barrel on all quantities of crude oil sold thereunder.

At present, SFD is gathering and selling approximately

1,400 to 1,700 barrels of crude oil on a daily basis.

Additionally, the acquisition of SFD would provide the Company with the infrastructure

needed to place a Remediation Processing Machine (“RPC”) to clean soil which has been contaminated by hydrocarbons as well

as tank bottom sludge.

Management believes SFD’s location in the heart of the Smackover formation would provide the Company with

access to significant amounts of tank bottom sludge and contaminated soil.

WCCC operates 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 and the Company intends to further connect the tank to the Medallion and Wolf pipeline systems if the acquisition

of WCCC is successfully completed.

Under the terms of an existing agreement, WC Crude has agreed to lease the oil storage tank for a period

As with SFD, WCCC would provide the Company with the infrastructure to blend and sell oil which has been recovered via a

RPC machine from tank bottom sludge and contaminated soil which exists in the Permian Basin.

This disclosure should be read in connection

with, and is subject to, the MIPA, a copy of which is attached hereto as Exhibit 2.1.

to the Lotus pipeline system and the Company intends to further connect the tank to a major pipeline system.

Under the terms of an

existing agreement, WC Crude has agreed to lease the oil storage tank for a period of 10 years.

As with SFD, WCCC would provide the Company

with the infrastructure to process and sell oil which has been recovered via a RPC machine from tank bottom sludge and contaminated soil

which exists in the Permian Basin.

Resignation of Chief Executive Officer and Chairman of the Board

On September 30, 2022, the Board of Directors of the Company received

notice from Matthew Nicosia, the Company’s Chief Executive Officer and Chairman of the Board of Directors of his resignation from

such positions.

Such resignations are not the result of any disagreement with the Company on any matter relating to the Company’s

operations, policies or practices.

Appointment of

Chief Executive Officer and Chairman of the Board;

Note Amendment Agreement

On October 28, 2022, we entered into an

executive employment agreement with James Ballengee (the “Employment Agreement”) with respect to our appointment of Mr.

Ballengee as Chief Executive Officer and Chairman of the Board.

Pursuant to the Employment Agreement, Mr.

Ballengee will receive

annual compensation of $1,000,000 payable in shares of our common stock issued in four equal quarterly installments, priced at the

volume weighted average price (VWAP) for the five trading days preceding the date of the Employment Agreement and each anniversary

thereof (the “CEO Compensation”).

For the first twelve months of Mr.

Ballengee’s employment, we will issue him a

total of 923,672 shares of our common stock, issuable 230,918 per quarter.

The CEO Compensation shall be subject to satisfaction of

Nasdaq rules, the provisions of the Company’s equity incentive plan and other applicable requirements and shall be accrued if

such issuance is due prior to satisfaction of such requirements.

Additionally, Mr.

Ballengee shall be eligible for a discretionary

performance bonus.

The Employment Agreement may be terminated by either party for any or no reason, by providing a five days’

notice of termination.

Pursuant to the Employment Agreement, Mr.

is granted the right to nominate two additional directors for appointment to the Board in his sole discretion, as well as a third additional

director upon issuance of the Note Payment Shares (defined below), subject to such directors passing a background check.

On October 28, 2022, in connection with the Employment Agreement, we

entered into an agreement with the Sellers amending the Notes (the “Note Amendment”), whereby, as soon as is practicable,

following and subject to the approval of our shareholders, and provided there are no applicable prohibitions under the rules of The Nasdaq

Capital Market or other restrictions, we will issue 7,042,254 restricted shares of our common stock (the “Note Payment Shares”)

as a payment of $10,000,000 toward the principal of the Notes on a pro rata basis, reflecting a conversion price of $1.42 per share (the

“Note Payment”).

6,971,831 shares will be issued to Jorgan and $9,900,000 of principal owed to Jorgan will be cancelled and

70,423 shares will be issued to JBAH and $100,000 of principal owed to JBAH will be cancelled.

No later than thirty

(30) days following the date the Note Payment and the Note Payment Shares are approved by our shareholders, we shall use our reasonable

best efforts to prepare and file with the SEC, a registration statement on Form S-1 or any other available form (the "Registration

Statement") for an offering of the Note Payment Shares to be made on a continuous basis pursuant to Rule 415 of the Securities Act.

On March 11, 2020, the World Health Organization

7 unchanged sentences

but have since resumed 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.

We have experienced supply chain disruptions in building our Remediation Processing Centers (“RPC”)

and completing certain refurbishment on our precious metal extraction machines.

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.

COVID-19 and the U.S.

5 unchanged sentences

know the full extent of the effects on the economy, the markets we serve, our business, or our operations.

Results of Operations for the Three and Six

Months ended June 30, 2022 and 2021

For the three months ended June 30, 2022 and 2021

we realized revenues of none and $22,000, respectively, representing a decrease of $22,000 or 100%.

For the six months ended June 30,

2022 and 2021 we realized revenues of none and $117,000, respectively, representing a decrease of $117,000 or 100%.

The decrease in revenue

is primarily attributed to our decision to divert our resources away from our precious metals business that we entered into during COVID-19

mandated shutdowns, and back to its primary remediation business and the manufacturing and site preparations for reopening our Remediation

Processing Centers (RPCs) for remediation and production.

For the three and six months ended June 30, 2021, approximately 99% of our revenues

were realized from precious metal sales from our business plan of buying and selling precious metal commodities on the open market during

the COVID-19 pandemic while our remediation operations were shut down or delayed.

These precious metals were acquired for immediate resale,

with us acting as intermediary and never keeping an inventory of precious metals.

Results of Operations for the Three and Nine

Months ended September 30, 2022 and 2021

For the three months ended September 30, 2022

and 2021 we realized revenues of $11,756,975 and $965,757, respectively, representing an increase of $10,800,218 or 1,118.32%.

nine months ended September 30, 2022 and 2021 we realized revenues of $11,765,975 and $1,082,757, respectively, representing an increase

of $10,683,218 or 986.67%.

The increase in revenue is primarily attributed to our oil and natural gas liquid sales which have been realized

through the operations from our newly acquired businesses in SFD and WCCC, which were acquired through our business combination, which

closed on August 1, 2022.

For the three and nine months ended September 30, 2021, approximately 99% of our revenues were realized from

precious metal sales from our business plan of buying and selling precious metal commodities on the open market during the COVID-19 pandemic

while our remediation operations were shut down or delayed.

These precious metals were acquired for immediate resale, with us acting as

intermediary and never keeping an inventory of precious metals.

Cost of Revenue

Our cost of revenues consisted primarily of costs

associated with selling our precious metals on the open market and precious metal commodity broker fees.

For the three months ended June 30, 2022 and 2021

costs of revenue were none and $20,530, respectively, representing a decrease of $25,530 or 100%.

For the six months ended June 30, 2022

and 2021 costs of revenue were none and $112,450, respectively, representing a decrease of $112,450 or 100%.

The decrease in the cost

of revenue directly relates to costs associated with selling our precious metals on the open market and precious metal commodity broker

As the decrease in revenue is primarily attributed to our decision to divert its resources away from our precious metals business

in 2022 that was entered into during COVID-19 mandated shutdowns, and back to our primary remediation business, and the manufacturing

an site preparations for reopening our RPCs for remediation and production, we did not realize costs of revenue from precious metal sales

from buying and selling precious metal commodities for the three and six months ended June 30, 2022.

For the nine months ended September 30, 2022,

our cost of revenues consisted primarily of costs associated with selling oil and natural gas liquid through the operations from our newly

acquired businesses in SFD and WCCC, which were acquired through our business combination which closed on August 1, 2022.

months ended September 30, 2021, our cost of revenues consisted primarily of costs associated with selling our precious metals on the

open market and precious metal commodity broker fees.

For the three months ended September 30, 2022

and 2021 costs of revenue were $10,536,628 and $938,226, respectively, representing an increase of $9,598,402 or 1,023.04%.

months ended September 30, 2022 and 2021 costs of revenue were $10,536,628 and $1,050,676, respectively, representing a increase of $9,485,952

The increase in the cost of revenue is primarily attributed to the cost of goods sold for our oil and natural gas liquid sales

realized through the operations from our newly acquired businesses in SFD and WCCC, which were acquired through our business combination,

which closed on August 1, 2022.

Gross Profit and Gross Margin

For the three months ended June 30, 2022 and 2021

we realized gross profit of none and $1,470, respectively, representing a decrease of $1,470 or 100%.

For the six months ended June 30,

2022 and 2021 we realized gross profit of none and $4,550, respectively, representing a decrease of $4,550 or 100%.

The gross profit decreased

in proportion to the revenue and costs of revenue related to the purchase and sale of precious metals as described above.

For the three months ended September 30, 2022

and 2021 we realized gross profit of $1,229,347 and $27,531, respectively, representing an increase of $1,201,816 or 4,365.32%.

nine months ended September 30, 2022 and 2021 we realized gross profit of $1,229,347 and $32,081, respectively, representing an increase

of $1,197,266 or 3,732.01%.

For the nine months ended September 30, 2022, the gross profit increased in proportion to the revenue and

costs of revenue related to the purchase and sale of oil and natural gas liquid.

For the nine months ended September 30, 2021, the gross

profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of precious metals as described above.

Operating Expenses

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

we realized operating expenses of $3,600,600 and $1,726,096, which represents an increase of $1,618,766, or 108.60%.

For the six months

ended June 30, 2022 and 2021, we realized operating expenses of $5,479,964 and $3,865,748, which represents an increase of $1,618,766,

The increase in our operating expenses were mainly attributed to accrued signing bonuses and employee stock options that were

issued related to the executive employment agreements entered into in June 2022 after the Company’ successful underwritten public

offering of gross proceeds of $8.0 million and uplist to Nasdaq in February 2022.

Whereas prior to the underwritten public offering and

uplist to Nasdaq, the executive employment agreements had no signing bonuses, paid the executives $50,000 per year, and only one executive

For the three months ended September 30, 2022

and 2021, we realized operating expenses of $3,543,526 and $1,433,548, which represents an increase of $2,109,978, or 147.19%.

nine months ended September 30, 2022 and 2021, we realized operating expenses of $9,023,490 and $5,299,296, which represents an increase

of $3,724,194, or 70.28%.

The increase in our operating expenses was mainly attributed to accrued signing bonuses and employee stock options

that were issued related to the executive employment agreements entered into in June 2022 after the Company’ successful underwritten

public offering of gross proceeds of $8.0 million and uplist to Nasdaq in February 2022.

Whereas prior to the underwritten public offering

and uplist to Nasdaq, the executive employment agreements had no signing bonuses, paid the executives $50,000 per year, and only one executive

had a stock option grant.

Although the executives are currently accruing substantial portions of their wages and signing bonuses to assist

the Company, the new employment agreements issued stock options to all executives, increased annual wages for all executives, and the

company paid or accrued signing bonuses of $225,000, For the three months ended June 30, 2022 and 2021, we realized employee stock option

expense of $1,229,175 and $111,528, which represents an increase of $1,121,466, or 1,002.1% increase.

For the six months ended June 30,

2022 and 2021, we realized employee stock option expense of $1,321,466 and $200,000, which represents an increase of $1,121,466, or 561%

the Company, the new employment agreements issued stock options to all executives, increased annual wages for all executives.

nine months ended September 30, 2022 and 2021 company has paid or accrued employee cash compensation of $599,067 and $101,568, which represents

an increase of $497,499, or 489.82%.

For the nine months ended September 30, 2022 and 2021, we realized employee stock option expense

of $2,185,615 and $334,584, which represents an increase of $1,851,031, or 553.23% increase.

Other income and expense

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

other expense was $1,627,263 and $9,096,785, which represents a decrease of $7,469,522, or 82.11%.

The decrease is mainly attributed to

unrealized loss of $1,652,755 and $8,949,169 on marketable securities, which represents a decrease of $7,296,414, or 81.53% in marketable

For the six months ended June 30, 2022 and 2021, other income (expense) was $(473,134) and $3,435,175, which represents a

decrease of $3,908,309, or 113.77%.

The decrease in other income is mainly attributed to unrealized gain (loss) of $(413,189) and 3,734,275

on marketable securities, which represents a decrease of $4,147,464, or 111.06% in marketable securities.

These securities were accounted

for at a fair value based on the quoted prices in the active markets and fluctuate based on market prices of the securities.

For the three months ended September 30, 2022

and 2021, other income (expense) was $567,724 and $(2,712,825), which represents an increase of $3,280,099, or 120.91%.

The increase is

mainly attributed to an unrealized gain (loss) of $1,074,290 and $(2,481,175) on marketable securities, which represents an increase of

$3,555,465, or 143.30% in marketable securities.

For the nine months ended September 30, 2022 and 2021, other income (expense) was $94,140

and $722,350, which represents a decrease of $628,210, or 86.97%.

The decrease in other income is mainly attributed to unrealized gains

of $661,101 and 1,253,100 on marketable securities, which represents a decrease of $591,999, or 47.24% in marketable securities.

securities were accounted for at a fair value based on the quoted prices in the active markets and fluctuate based on market prices of

the securities.

Provision for income tax

The Company recorded an income tax provision of

none and $296,477 for the three months ended June 30, 2022 and 2021, respectively, representing a decrease of $296,477 or 100%.

recorded an income tax provision of $800 and $723,911 for the six months ended June 30, 2022 and 2021, respectively, representing a decrease

of $723,111 or 99.89%.

The effective tax rate as of June 30, 2022 and 2021 was (0.04)% and 9.18%.

The difference in effective tax rate

was primarily due to the decrease in unrealized gains on marketable securities for the six months ended June 30, 2022 and 2021.

none and $723,911 for the three months ended September 30, 2022 and 2021, respectively, representing a decrease of $723,911 or 100%.

Company recorded an income tax provision of $800 and none for the nine months ended September 30, 2022 and 2021, respectively, representing

a decrease of $800 or 100%.

The effective tax rate as of September 30, 2022 and 2021 was (0.01)% and 9.18%.

The difference in effective

tax rate was primarily due to the decrease in unrealized gains on marketable securities for the nine months ended September 30, 2022 and

The following table sets forth the primary sources

and uses of cash and cash equivalents for the six months ended June 30, 2022 and 2021 as presented below:

and uses of cash and cash equivalents for the nine months ended September 30, 2022 and 2021 as presented below:

September 30,

Net cash used in operating activities

5 unchanged sentences

We have historically suffered net losses and cumulative

negative cash flows from operations and, as of June 30, 2022 and 2021, we had an accumulated deficit of approximately $41.2 million and

$30.1 million.

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

had cash and cash equivalents of $5,204,591 and $1,493,719, with $296,257 and $199,952 attributed to variable interest entities, respectively.

negative cash flows from operations and, as of September 30, 2022 and 2021, we had an accumulated deficit of approximately $42.8 million

and $33.1 million.

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

we had cash and cash equivalents of $4,521,791 and $1,493,719, with $147,865 and $199,952 attributed to variable interest entities, respectively.

To date we have financed our operations primarily

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Common Stock began trading on the Nasdaq Capital Market under the symbol “VIVK”.

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

our net cash used in operating activities was driven by the consolidated net loss of $5,953,898 and 1,149,934, which change is mainly

attributed to unfavorable changes in the market which decreased unrealized gains on marketable securities and the increase in stock-based

compensation as described above.

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

our net cash used in investing activities was mainly attributed to our purchase of equipment of $1,129,515 and $1,334,123 related to the

manufacturing of our RPCs.

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

our net cash provided by our financing activities was mainly attributed to proceeds of $1,968,261 and $6,666,811 related to the issuance

of convertible bridge notes and other loans, and in 2022, proceeds of $6,240,000 from the February 14, 2022 underwritten public offering

of 1,600,000 shares of common stock.

We made distributions to noncontrolling interests of $343,889 and none for the six months ended June

For the nine months ended September 30, 2022 and

2021, our net cash used in operating activities was driven by the consolidated net loss of $7,716,919 and 4,544,865, including expense

related amortization and depreciation expense, stock options issued for services, and the increase in stock-based compensation as described

For the nine months ended September 30, 2022 and

2021, our net cash used in investing activities was mainly attributed to our purchase of equipment of $1,807,140 and $2,260,458 related

to the manufacturing of our RPC plants.

For the nine months ended September 30, 2022 and

2021, our net cash provided by our financing activities was mainly attributed to proceeds of $3,177,622 and $8,033,407 related to the

issuance of convertible bridge notes and other loans, and from the proceeds of $6,240,000 from our February 14, 2022 underwritten public

offering of 1,600,000 shares of common stock.

We made distributions to noncontrolling interests of $593,087 and none for the nine months

ended September 30, 2022 and 2021.

We also made payments on notes payable of $534,111 and $374,065 for the nine months ended September

30, 2022 and 2021.

We also made payments on notes payable of $277,145 and $2,464 for the six months ended June 30, 2022 and 2021.

There are no further existing firm obligations;

however we anticipate further construction costs of approximately $1.35 million in connection with our construction in process of our

however we anticipate further construction costs of approximately $2.5 million in connection with our construction in process of our current

Our ability to continue to access capital could

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to grow our business may be negatively affected.

We believe the liquid assets of the Company give it adequate working

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

We believe the liquid assets of the Company give

it adequate working capital to finance our day-to-day operations for at least twelve months through November 2023.

Contractual Obligations

Our contractual obligations as of June 30, 2022

are for operating lease liabilities for office and warehouse space, which leases end in 2024 and 2025.

Operating lease obligations as

of June 30, 2022 are as follows:

Our contractual obligations as of September 30,

2022 for finance lease liabilities are for the sale and leaseback of certain land, property, plant, and equipment that were acquired in

the closing of our business combination, which acquired SFD and WCCC on August 1, 2022, which leases end in 2025 and 2026.

Finance lease

obligations as of September 30, 2022 are as follows:

Our contractual obligations as of September 30,

2022 for operating lease liabilities are for office and warehouse space, which leases end in 2024 and 2025.

Operating lease obligations

as of September 30, 2022 are as follows:

Interest Rate and Market Risk

Our financing arrangements are not subject to

variable interest rates of the prime rate or LIBOR.

Inflation generally will cause suppliers to increase

In connection with such rate increases, we may or may not be able to increase our pricing to consumers.

Inflation could cause

both our investment and cost of revenue to increase, thereby lowering our return on investment and depressing our gross margins.

Interest Rate Risk

Interest rate risk is the potential for reduced

net interest income and other rate-sensitive income resulting from adverse changes in the level of interest rates.

We do not have variable

interest rate-sensitive income agreements.

We do have financing arrangements that were issued on August 1, 2022 as consideration for the

business combination and acquisition of SFD and WCCC, in which the three year notes have variable interest rates based on the prime rate,

which exposes us to further interest expense if the prime rate increases.

We believe that the LIBOR is being phased out globally and do

not have any financings with variable interest rates based on the LIBOR.

Market Risk — Equity Investments

Market risk is the potential for loss arising

from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments

as a result of changes in interest rates or other factors.

We own equity securities that are publicly traded.

Because the fair value of

these securities may fall below the cost at which we acquired them, we are exposed to the possibility of loss.

Equity investments are

approved, monitored, and evaluated by members of management.

Prolonged periods of slow growth, significant

inflationary pressures, volatility and disruption in financial markets, could lead to increased costs of doing business.

Inflation generally

will cause suppliers to increase their rates, and inflation may also increase employee salaries and benefits.

In connection with such

rate increases, we may or may not be able to increase our pricing to consumers.

Inflation could cause both our investment and cost of

revenue to increase, thereby lowering our return on investment and depressing our gross margins.

Off Balance Sheet Arrangements

Critical Accounting Policies & Use of Estimates

There have been no material changes to our critical

accounting policies and the use of estimates from these disclosures reported in the Amendment No.

1 to our Annual Report on Form 10-K/A

for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on May 2, 2022.

There have been no material

changes to our critical accounting policies and the use of estimates from these disclosures reported in the Amendment No.

1 to our Annual

Report on Form 10-K/A for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on May 2, 2022.

August 1, 2022, we closed a Membership Interest Purchase Agreement (“MIPA”), with Jorgan Development, LLC, and JBAH Holdings,

LLC, as the equity holders of Silver Fuels Delhi, LLC ("SFD") and White Claw Colorado City, LLC ("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 Company.

The measurement of assets acquired and liabilities assumed in the business

combination is based on preliminary estimates made by management and subject to adjustment within twelve months.

Management estimated

the provisional fair values of the intangible assets and goodwill related to this business combination at September 30, 2022.

is performing a valuation study to calculate the fair value of the acquired intangible assets and goodwill, which it plans to complete

within the one-year measurement period.

With the close of the MIPA on August 1,

2022, we adopted ASU No.

2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,

which was issued by FASB in October 2021.

The guidance improves the accounting for acquired revenue contracts with customers in

a business combination by requiring contract assets and contract liabilities acquired in a business

combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue

from Contracts with Customers, as if the acquirer had originated the contracts.

This guidance will be effective for fiscal years

beginning after December 15, 2022, including interim periods within that year, with early adoption permitted.

The Company does not

believe this pronouncement will materially impact our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis