Vivakor, Inc. 10-K

Item 5 - Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is listed on the Nasdaq Capital Market under the symbol “VIVK.” Holders As of March 27, 2023, there were 18,064,838 shares of Common Stock outstanding held by approximately 559 holders of record (not including an indeterminate number of beneficial holders of stock held in street name). Warrants There is a warrant to purchase 80,000 shares of common stock issued and outstanding as of March 27, 2023. Dividends To date, we have not paid any dividends on our common stock and do not anticipate paying any dividends in the foreseeable future. The declaration and payment of dividends on the common stock is at the discretion of our Board of Directors and will depend on, among other things, our operating results, financial condition, capital requirements, contractual restrictions or such other factors as our Board of Directors may deem relevant. Securities Authorized for Issuance under Equity Compensation Plans On February 14, 2022, our 2021 Equity and Incentive Plan went effective. The plan was approved by our Board of Directors. The Plan’s number of authorized shares is 2,000,000. As of March 27, 2023, there were stock options granted to acquire 1,721,760 shares of common stock at a weighted exercise price of $1.76 per share under the plan. As of March 27, 2023, the Plan had 1,431,730 vested shares and 290,030 non-vested shares underlying the stock options. As of March 27, 2023, no options had been exercised under the Plan. We have not issued any other type of equity awards under the Plan. The stock options issued under the Plan are held by certain of our current and former executive officers. Recent Issuance of Unregistered Securities The following sets forth information regarding all unregistered securities sold by us in transactions that were exempt from the requirements of the Securities Act in the last fiscal year. Except where noted, all of the securities discussed in this Item 5 were all issued in reliance on the exemption under Section 4(a)(2) of the Securities Act. 2022 On July 19, 2022, the Company granted 16,667 shares of our common stock for a stock award, which successfully cliff vested in May 2022. On August 1, 2022, the Company consummated the transactions under the previously disclosed Membership Interest Purchase Agreement dated June 15, 2022 (the “MIPA”), which included the issuance of an aggregate of 3,009,552 shares of Common Stock to Jorgan Development, LLC and JBAH Holdings, LLC. The issuances of the foregoing securities were exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder. As noted herein, in connection with the commencement of the trading of our Common Stock on Nasdaq Capital Market, we converted 66,667 shares of Series A Preferred Stock in to 833,333 shares of our common stock. This offering and sales were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. To make this determination we relied on the representations of the purchasers contained in the securities purchase agreements signed by the purchasers, which indicated the purchasers were knowledgeable about our management and our operations, were sophisticated investors, and understood the purchase was part of a private placement. 25 As noted herein, in connection with the commencement of the trading of our Common Stock on Nasdaq Capital Market, approximately $1,144,992 in convertible notes payable were converted into 272,156 shares of our common stock. This offering and sales were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. To make this determination we relied on the representations of the purchasers contained in the securities purchase agreements signed by the purchasers, which indicated the purchasers were knowledgeable about our management and our operations, were sophisticated investors, and understood the purchase was part of a private placement. As noted herein, in connection with underwritten public offering of 1,600,000 shares of common stock, we issued the underwriter, EF Hutton, a 5-year warrants to purchase 80,000 shares of common stock at an exercise price equal $5.75. This offering and sales were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. To make this determination we relied on the representations of the purchasers contained in the securities purchase agreements signed by the purchasers, which indicated the purchasers were knowledgeable about our management and our operations, were sophisticated investors, and understood the purchase was part of a private placement. Item 7 - Management ’ s Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report on 10-K. Overview Vivakor, Inc. is a socially responsible operator, acquirer and developer of technologies and assets in the oil and gas industry, as well as, related environmental solutions. Currently, our efforts are primarily focused on operating crude oil gathering, storage and transportation facilities, as well as contaminated soil remediation services. 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 owns 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. Our soil remediation services 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. 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. Reclassifications Certain reclassifications may have been made to prior years’ amounts to conform to the 2022 presentation. COVID-19 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 markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease. In March 2020 we temporarily suspended operations in Kuwait and Utah due to COVID-19 government restrictions. Utah and Kuwait have since resumed site preparations for operations. We have experienced supply chain disruptions in building our Remediation Processing Centers (“RPC”) and completing certain refurbishment on our precious metal extraction machines. 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. response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have in the long-term, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations. 26 Revenue For the years ended December 31, 2022 and 2021 we realized revenues of $28,107,223 and $1,088,428, respectively, representing an increase of $27,018,795 or 2,482.37%. 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 year ended December 31, 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 For the year ended December 31, 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. For the year ended December 31, 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 years ended December 31, 2022 and 2021 costs of revenue were $25,239,962 and $1,050,676, respectively, representing an increase of $24,189,286 or 2,302.26%. The increase in the cost of revenue is primarily attributed to the cost of goods sold for our oil and natural gas liquid products 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 years ended December 31, 2022 and 2021 we realized gross profit of $2,867,261 and $37,752, respectively, representing an increase of $2,829,509 or 7,494.99%. For the year ended December 31, 2022, the gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of our oil and natural gas liquid products. For the year ended December 31, 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. Our gross margin will continue to be affected by a variety of factors that include the market prices of our oil products, the volume produced by our facilities, and our ability to raise capital to continue to fund our operations or other ancillary agreements outside of the oil gathering, transportation, and storage activities. Operating Expenses Our operating expenses consist primarily of marketing, general and administrative expenses, bad debt expense, impairment loss, and amortization and depreciation expense. Marketing expenses include marketing fees of company representatives for marketing the business and is products and services as well as investor customer service. General and administrative expenses include professional services, including audit, tax, and legal fees associated with the costs for services in finance, accounting, administrative activities and the formation and compliance of a public company. Bad debt expense includes the expense associated with assets that management analyses and estimates may be uncollectible. Impairment loss includes the expense associate with events or changes in circumstances that indicate the carrying amount of an asset 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. Amortization and depreciation expense uses the useful life of the asset to calculate the amortization or depreciation expense in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and management’s judgment. For the years ended December 31, 2022 and 2021, we realized operating expenses of $25,611,216 and $6,963,668, which represents an increase of $18,647,548, or 267.78%. Our operating expenses increased due to multiple substantial events and their associated expenses throughout 2022, including approximately $12,300,837 in impairment loss and bad debt expense, as discussed below. 27 For the years ended December 31, 2022 and 2021, we realized an impairment loss of $11,138,830 and none, which represents an increase of $11,138,830 or 100%. Our impairment loss directly related to multiple events throughout 2022, including disruptions at our Vernal, Utah plant due to recent, supply and personnel limitations, in which we realized an impairment loss of $447,124 on this license agreement with TBT Group and the possibilities of embedding self-powered sensors directly into the asphaltic cement we may generate from the Vernal, Utah RPC; After taking into consideration new information related to the costs of building our own test facility or using new partners to test our ammonia synthesis catalyst, we realized an impairment loss of $3,254,999 to our ammonia synthesis assets; The operations surrounding our precious metals extraction services were suspended until recently, although due to these suspended activities and a shift in 2022 of the Company’s focus to the oil and gas industry, we have realized an impairment loss $6,269,998 surrounding the extraction machinery, and we reserved further against our work-in-process precious metal concentrate in the amount of $1,166,709 as it has not been sold as anticipated in its concentrate form. For the years ended December 31, 2022 and 2021, we realized bad debt expense of $1,162,007 and none, which represents an increase of $1,162,007 or 100%. The increase in bad debt expense is directly related to two note receivables. The first note receivable relates to the sale 3,309,578 shares of marketable securities in December 2021 in a private transaction for a purchase price of $860,491, reflecting the market price as of such time. Such purchase price was paid in the form of $10,000 cash delivered at signing and a note issued in favor of Vivakor in the amount of $850,491 with payments due quarterly over a five-year term. The purchaser made their initial payment in the first quarter of 2022 but has not made further payments. The second note receivable is a $333,744 note receivable with TMC Capital, LLC, an affiliate of MCW Energy Group Limited. The parties amended their agreement in December 2021 to have the note paid on or before October 1, 2022, but we have not received payment. As of December 31, 2022 we have reserved against these notes in the amount of $828,263 and $333,744. For the years ended December 31, 2022 and 2021, we realized management and board of director compensation, and audit, tax, legal expenses of $6,268,684 and $1,409,267, which represents an increase of $4,859,417 or 344.82%. Throughout 2022 we recognized increased professional services and compensation expenses, which relate to our registration statement, its amendments, preparing for and completing an underwritten public offering of our common stock, including our preparations and completion of an uplist of our common stock to a senior stock exchange, and two substantial acquisitions of SFD and WCCC. For the years ended December 31, 2022 and 2021, professional services related to audit, tax, and legal, were $1,463,089 and $404,711 which represents an increase of $1,058,378 or 261.51%. For the years ended December 31, 2022 and 2021, the (accrued or paid) cash compensation of management and the board of directors was $1,562,456 and $214,556 which represents an increase of $1,347,500 or 628.23%, with management accruing approximately 85% of its salary, bonus, and signing bonus compensation (see Note 14). The increase in salary compensation expense was primarily attributed to new compensation agreements with management and the board members serving at that time after the Company’s successful underwritten public offering of net proceeds of $6.2 million and uplist to Nasdaq in February 2022. New compensation agreements were entered into as a result of previous executive management being significantly undercompensated prior to the underwritten public offering and uplist to Nasdaq (see Note 17). In order to retain management, in June 2022, executive salaries were increased, signing bonuses were granted, and stock options were issued to both executives at the time as authorized and granted by the board of directors for the two then executives (see Note 17). In October 2022 our previous CEO resigned, and we entered into an employment agreement with our current CEO, where the CEO salary increased to $1,000,000 annually, but is only payable in common stock of the Company (see Note 17). Further, the independent directors serving at that time increased their compensation, which included signing bonuses, and granted stock options to the independent board members that vested immediately (where previously there were no signing bonuses and stock options vested over one year), which increased board compensation expense approximately $250,000 in 2022. For the years ended December 31, 2022 and 2021, we realized stock option expense of $4,079,591 and $2,031,112, which represents an increase of $2,048,479, or 100.86% increase. For the years ended December 31, 2022 and 2021, we realized amortization and depreciation expense of $2,953,629 and $1,462,492, which represents an increase of $1,491,137 or 101.96%. The increase in amortization and depreciation expense is primarily attributed to the amortization of our newly acquired contracts (see Note 13) and depreciation from our newly acquired property, plant and equipment held by SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022. Loss from Operations For the years ended December 31, 2022 and 2021, we realized a loss from operations of $22,743,955 and $6,925,916, which represents an increase of $15,818,039, or 228.39%. The increase in loss is attributed to the net effect of the increase in gross profit and increase in operating expenses discussed above. 28 Interest expense For the years ended December 31, 2022 and 2021, we realized interest expense of $1,519,281 and $501,598, which represents an increase of $1,017,683, or 202.89%. The increase in interest expense is mainly attributable the $28,664,284 in notes payable issued as consideration for our newly acquired entities, SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022. The notes accrue interest of prime plus 3% on the outstanding balance of the notes. For the year ended December 31, 2022, the Company accrued $1,126,429 in interest on these notes payable. Unrealized loss on marketable securities For the years ended December 31, 2022 and 2021, we reported an unrealized loss of $578,464 and $1,094,054 on marketable securities, which represents a decrease in the unrealized loss of $515,590, or 47.13%. Our marketable securities were considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized losses as noted above. Gain disposition of assets For the years ended December 31, 2022 and 2021, we recorded a gain on the disposition of certain assets of $2,456 and $87,044, which represents a decrease of $84,588, or 97.18%. In 2022 the Company sold a vehicle, which resulted in a gain on the sale of $2,456. In August 2021 we converted $81,768 of our note receivable with Scepter Holdings, Inc. (“Scepter”, Ticker: BRZL, OTC Markets) into 26,376,882 shares of the borrower’s common stock pursuant to the terms of the note at $0.0031 per share. On the date of the conversion, the 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. Provision for income tax The Company recorded an income tax benefit of $4,436,691 and $1,050,207 for the years ended December 31, 2022 and 2021, respectively. The Company’s effective tax rate for 2022 and 2021 was 18.69% and 16.48%, which was the result of the benefit of book losses offset by an additional valuation allowance on the net operating losses. Cash flows The following table sets forth the primary sources and uses of cash and cash equivalents for the years ended December 31, 2022 and 2021 as presented below: December 31, 2022 2021 Net cash used in operating activities $ (4,143,297 ) $ (2,901,696 ) Net cash used in investing activities (2,332,754 ) (4,514,642 ) Net cash provided by financing activities 8,165,125 8,511,153 Liquidity and Capital Resources We have historically suffered net losses and cumulative negative cash flows from operations and, as of December 31, 2022 and 2021, we had an accumulated deficit of approximately $55.2 million and $35.7 million. As of December 31, 2022 and 2021, we had an working capital deficit of approximately $3.77 million and $2.09 million, respectively. As of December 31, 2022 and 2021, we had cash and cash equivalents of $3,182,793 and $1,493,719, with $81,607 and $199,952 attributed to variable interest entities, respectively. To date we have financed our operations primarily through debt financing, private equity offerings and our working interest agreements, although on February 14, 2022, 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 net proceeds of $6.2 million, after deducting underwriting discounts, commissions, and other offering expenses. The Company’s Common Stock began trading on the Nasdaq Capital Market under the symbol “VIVK”. 29 For the years ended December 31, 2022 and 2021, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $20,247,621 and $7,255,706, a $4,437,492 and $1,051,007 (decrease) related to our provision for income taxes and deferred tax liabilities, our depreciation and amortization of $2,953,629 and $1,462,492, an impairment loss of $11,138,830 and none, a bad debt expense of $1,162,007 and none, an decrease in accounts receivable of $2,613,278 and 6,890, changes in accounts payable of $3,408,157 (decrease) and $38,128 (increase), changes in prepaids of $59,900 and none, and changes inventory of $162,148, all of which are directly related to our 2022 acquisitions’ (SFD and WCCC’s) operations. For the years ended December 31, 2022 and 2021, we were also able to issue stock for services of $1,472,888 and $438,004, common stock options issued for services in relation to a consultant and the Board of Director of $1,472,888 and $1,585,000, and stock-based compensation employees of $2,606,703 and $446,112 in lieu of using cash. We also realized interest expense on loans and notes payable of $1,454,752 and $501,598 related to the $28,664,284 in notes payable issued as consideration for our newly acquired entities, SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022. For the years ended December 31, 2022 and 2021 we also realized a $2,456 and $87,044 gain on the disposition of assets, including the sale of vehicle in 2022 and the conversion of a note receivable in 2021, and an unrealized loss of $578,464 and $1,094,054 on marketable securities as described above. For the years ended December 31, 2022 and 2021, our net cash used in investing activities was mainly attributed to our purchase of equipment of $2,491,174 and $4,236,276 related to the manufacturing of our RPCs and a wash plant facilities (2022). The Company also paid $265,000 for an additional license technology for piezo electric and energy harvesting technologies for creating self-powered sensors for making smart roadways in 2021. Our net cash provided by our financing activities was mainly attributed to the net effect of the following events: For the year ended December 31, 2022 and 2021, and we received proceeds of $3,640,046 and $9,135,984related to the issuance of convertible bridge notes and other loans. For the year ended December 31, 2021, as included in the proceeds above, we obtained Paycheck Protection Program loans for $295,745 that may be forgiven under the CARES Act, if we can demonstrate that the proceeds from the loan were used for eligible expenses . We also received proceeds of $6,240,000 from our February 14, 2022 underwritten public offering of 1,600,000 shares of common stock. For the years ended December 31, 2022 and 2021 we paid down notes payable by $853,230 and $562,046 and made distributions to Viva Wealth Fund I, LLC unit holders of $861,691 and $55,050. Capitalized interest on construction in process was none and $1,614,697 for the year ended December 31, 2022 and 2021. There are no further existing firm obligations; however, we anticipate further construction costs of approximately $1.7 million in connection with our construction in process of our RPC Series A & B; and construction for each Nanosponge costs approximately $200,000, and we intend to manufacture and add a Nanosponge to our current and future RPCs. We have historically suffered net losses and cumulative negative cash flows from operations, and as of December 31, 2022, we had an accumulated deficit of approximately $55.2 million. As of December 31, 2022 and 2021, we had a working capital deficit of approximately $3.77 million and $2.09 million, respectively. As of December 31, 2022 we had cash of $3.1 million. In addition, we have obligations to pay approximately $17,500,000 (of which approximately $16,500,000 can be satisfied through the issuance of our common stock under the terms of the debt and $334,000 is related to PPP loans that are anticipated to be forgiven) of debt in cash within one year of the issuance of these financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In February 2022, 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 net proceeds of $6.2 million, after deducting underwriting discounts, commissions, and other offering expenses. Prior to the offering, we financed our operations primarily through debt financing, private equity offerings, and our working interest agreements. We believe the liquid assets from the Company’s available for sale investments and funding provided from subsequent fundraising activities (see Note 24) of the Company will give it adequate working capital to finance our day-to-day operations for at least twelve months through May 2024. Our CEO has also committed to provide credit support through June 2024, as necessary, for an amount up to $8 million to provide the Company sufficient cash resources, if required, to execute its plans for the next twelve months. Based on the above, we believe these plans alleviate substantial doubt about the Company’s ability to continue as a going concern. Our ability to continue to access capital could be affected adversely by various factors, including general market and other economic conditions, interest rates, the perception of our potential future earnings and cash distributions, any unwillingness on the part of lenders to make loans to us and any deterioration in the financial position of lenders that might make them unable to meet their obligations to us. If we cannot raise capital through public or private debt financings, equity offerings, or other means, our ability to grow our business may be negatively affected. In such case, we may need to suspend site and plant construction or further acquisitions until market conditions improve. Contractual Obligations Our contractual obligations as of December 31, 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 December 31, 2022 are as follows: 2023 $ 963,900 2024 963,900 2025 594,792 2026 471,756 Total $ 2,994,383 30 Our contractual obligations as of December 31, 2022 for operating lease liabilities are for office and warehouse space, which leases end in 2024 and 2025, and a land lease which ends in 2042. Operating lease obligations as of December 31, 2022 are as follows: 2023 $ 471,991 2024 435,906 2025 162,545 2026 136,975 2027 153,089 Thereafter 2,865,620 Total $ 4,226,126 Interest Rate and Market Risk 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. Inflation 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 None. Critical Accounting Policies & Use of Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements included in this report, which have been prepared in accordance with GAAP. For further information on the critical accounting policies see Note 3 of the Notes to the Consolidated Financial Statements. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. Estimates by their nature are based on judgments and available information. Our estimates are made based upon historical factors, current circumstances and the experience and judgment of management. Assumptions and estimates are evaluated on an ongoing basis, and we may employ outside experts to assist in evaluations. Therefore, actual results could materially differ from those estimates under different assumptions and conditions. We believe our critical accounting estimates relate to the following: Recoverability of current and noncurrent assets, revenue recognition, stock-based compensation, income taxes, effective interest rates related to long-term debt, marketable securities, lease assets and liabilities, valuation of stock used to acquire assets, and derivatives. Item 7A - Quantitative and Qualitative Disclosures About Market Risk Not applicable. 31 Item 8 - Financial Statements and Supplementary Data The consolidated financial statements required by this item begin on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference. Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.