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Item 5. Market for Registrant’s Common Equity

2024-04-17 compared with 2023-05-25 · 282 added, 319 removed, 57 unchanged (91% of the section changed)

1 unchanged sentence

Common Stock is listed on the Nasdaq Capital Market under the symbol “VIVK.”

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).

is a warrant to purchase 80,000 shares of common stock issued and outstanding as of March 27, 2023.

As of April 4, 2024, there were 27,710,253

shares of Common Stock outstanding held by approximately 534 holders of record (not including an indeterminate number of

beneficial holders of stock held in street name).

is a warrant to purchase 80,000 shares of common stock issued and outstanding as of April 4, 2024.

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.

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.

Authorized for Issuance under Equity Compensation Plans

On November 10, 2023, our 2023 Equity and

Incentive Plan went effective.

The plan was approved by our Board of Directors and by the holders of a majority of our common stock.

Plan’s number of authorized shares is 40,000,000.

As of April 4, 2024, no options had been granted or exercised under the Plan.

As of April 4, 2024, there were stock awards granted of 3,584,340 shares of common stock at a weighted exercise price of $0.83 per share

under the plan.

As of April 4, 2024, the Plan had 2,394,882 vested shares and 1,189,458 non-vested shares underlying the stock awards.

We have not issued any other type of equity awards under the Plan.

On February 14, 2022, our 2021 Equity and

2 unchanged sentences

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.

As of April 4, 2024, there were stock options and awards granted to acquire 1,816,900 shares of common stock at a weighted exercise price

of $2.50 per share under the plan.

As of April 4, 2024, the Plan had 1,720,221vested shares and 96,679 non-vested shares underlying the

stock options.

As of April 4, 2024, no options had been exercised under the Plan.

We have not issued any other type of equity awards under

The stock options issued under the Plan are held by certain of our current and former executive officers.

4 unchanged sentences

in reliance on the exemption under Section 4(a)(2) of the Securities Act.

July 19, 2022, the Company granted 16,667 shares of our common stock for a stock award, which successfully cliff vested in May 2022.

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.

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.

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,

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.

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.

June 20, 2023, we issued a 15% secured promissory note (the “Note”) due as described below, to DIC, in the principal

amount of up to $1,950,000 (the “Principal Amount”), in relation to the Services Agreement.

The Company will use the

proceeds of the Note in refurbishing, relocating and fully installing the Company’s RPC currently located in Vernal, Utah

to DIC’s location in Kuwait.

As security interest to secure repayment of the Note, the Company issued DIC an option to purchase

1,000,000 shares of the Company’s common stock at an exercise price of $1.179 per share (the “Option”).

time there are amounts due to DIC under the Note, DIC may use the amounts then outstanding to purchase some or all of the shares

under the Option by using the outstanding amounts as payment of the exercise price under the Option.

August 29, 2023, we issued 154,744 shares of common stock at approximately $1.42 per share for a $220,000 reduction of liabilities.

October 6, 2023, we issued 35,000 shares of common stock at approximately $1.00 per share for a $35,000 reduction of liabilities.

October 28, 2022, we agreed to issue 7,042,254 restricted shares of our common stock in exchange for the forgiveness and cancellation

of $10,000,000 of principal under certain promissory notes held by entities controlled by James Ballengee, our Chief Executive

Officer, on a pro rata basis, reflecting a conversion price of $1.42 per share.

These shares were issued on November 10, 2023.

October 28, 2022, we entered into an executive employment agreement with James Ballengee (the “Employment Agreement”)

with respect to the Company’s appointment of Mr.

Ballengee as Chief Executive Officer and Chairman of the Board.

to the Employment Agreement, Mr.

Ballengee will receive annual compensation of $1,000,000 payable in shares of the Company’s

Common Stock, 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 Shares”).

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 (the “CEO Compensation Shares Issuance”).

923,672 shares of our common stock for the CEO Compensation Shares Issuance on November 10, 2023.

7 - Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

2 unchanged sentences

statements and related notes included elsewhere in this Annual Report on 10-K.

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.

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.

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

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.

The storage tank is presently connected to the

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

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

reclassifications may have been made to prior years’ amounts to conform to the 2023 presentation.

March 11, 2020, the World Health Organization (“WHO”) declared the COVID-19 outbreak to be a global pandemic.

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 the disease.

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

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.

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.

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

the years ended December 31, 2023 and 2022, we realized revenues of $59,321,752 and $28,107,223, respectively, representing

an increase of $31,214,529 or 111.06%.

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.

the year ended December 31, 2023 and 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.

the years ended December 31, 2023 and 2022, costs of revenue were $54,300,788 and $25,239,962, respectively, representing an

increase of $29,060,826 or 115.14%.

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.

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%.

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.

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 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.

the years ended December 31, 2023 and 2022, we realized gross profit of $5,020,964 and $2,867,261, respectively, representing

an increase of $2,153,703 or 75.11%.

For the year ended December 31, 2023 and 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.

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 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 its 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 associated 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, 2023

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

and 2022, we realized operating expenses of $11,352,624 and $25,611,216, which represents a decrease of $14,258,592, or 55.67%.

Our operating

expenses decreased 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.

For the years ended December 31, 2023

2022 and 2021, we realized an impairment loss of $11,138,830 and none, which represents an increase of $11,138,830 or 100%.

and 2022, we realized an impairment loss of none and $11,138,830, which represents a decrease 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.

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.

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

For the years ended December 31, 2022 and 2021, professional services related to audit, tax, and legal, were $1,463,089 and

loss directly related to multiple events throughout 2022, including disruptions at our Vernal, Utah plant due to supply and

personnel limitations, in which we realized an impairment loss of $447,124 on a 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;

taking into consideration new information in 2022 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 2022, 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 had not been sold as anticipated in its concentrate form during 2022.

In 2023 we agreed with TBT Group, Inc.

to cancel the

license agreement and both parties agreed to fully release and discharge any and all known and unknown claims they may have against

the other party, with neither party owing the other party any money and TBT retaining the ownership of the piezo electric and energy

harvesting technology that was the subject of the license agreement.

For the years ended December 31, 2023

and 2022, we realized bad debt expense of none and $1,162,007, which represents a decrease of $1,162,007 or 100%.

The decrease in bad

debt expense is directly related to two note receivables.

The first note receivable relates to the sale of 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.

In 2022 we reserved against these notes in the amount of $828,263 and $333,744.

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 example, for the

years ended December 31, 2023 and 2022, we realized stock option expense of $2,064,466 and $4,079,591, which

represents an decrease of $2,015,125, or 49.40% decrease.

the years ended December 31, 2023 and 2022, we realized amortization and depreciation expense of $3,932,744 and $2,953,629,

which represents an increase of $979,115 or 33.15%.

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.

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.

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.

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%.

in loss is attributed to the net effect of the increase in gross profit and increase in operating expenses discussed above.

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.

For the years ended December 31, 2023

and 2022, we realized a loss from operations of $6,331,660 and $22,743,955, which represents a decrease of $16,412,295, or 72.16%.

decrease in loss is attributed to the net effect of the increase in gross profit and decrease in operating expenses discussed above.

For the years ended December 31, 2023

and 2022, we realized interest expense of $4,025,077 and $1,519,281, which represents an increase of $2,505,796, or 164.93%.

in interest expense is mainly attributable 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.

The notes accrue interest of

prime plus 3% on the outstanding balance of the notes.

For the years ended December 31, 2023 and 2022, the Company accrued $2,993,121

and $1,126,429 in interest on these notes payable.

loss on marketable securities

the years ended December 31, 2023 and 2022, we reported an unrealized loss of $1,156,928 and $578,464 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.

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.

which represents an increase in the unrealized loss of $578,464, or 100%.

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.

on deconsolidation of variable interest entity

accordance with ASC 810, as of October 1, 2023, we deconsolidated Viva Wealth Fund I, LLC (VWFI), recognizing a gain on deconsolidation

The assets ($10.2 million), liabilities ($551,950) and equity ($10.1 million) related to VWFI were removed from our

financial statements (Note 3 Principles of Consolidation ), resulting in the gain on deconsolidation.

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.

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:

The Company recorded an income tax benefit

(provision) of (92,703) and $4,436,691 for the years ended December 31, 2023 and 2022, respectively.

The Company’s effective

tax rate for 2023 and 2022 was -0.88% and 18.69%, which was the result of the (provision) or benefit of book income/losses offset by

an additional valuation allowance on the net operating losses.

following table sets forth the primary sources and uses of cash and cash equivalents for the years ended December 31, 2023

and 2022 as presented below:

cash used in operating activities

$ (4,143,297 )

$ (2,901,696 )

cash used in investing activities

1 unchanged sentence

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.

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

We have historically suffered net losses

and cumulative negative cash flows from operations and, as of December 31, 2023 and 2022, we had an accumulated deficit of approximately

$65.9 million and $55.2 million.

As of December 31, 2023 and 2022, we had a working capital deficit of approximately $34.9 million

and $3.77 million, respectively.

of December 31, 2023 and 2022, we had cash and cash equivalents of $744,307 and $3,182,793, with none and $81,607 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”.

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)

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

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”.

For the years ended December 31, 2023

and 2022, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $10,835,275 and

$20,247,621, a $88,323 and $(4,437,492) related to our provision for income taxes and the net effect on deferred tax liabilities (deferred

tax assets), our depreciation and amortization of $3,932,744 and $2,953,629, an impairment loss of none and $11,138,830, a bad debt expense

of none and $1,162,007, a gain on the deconsolidation of a variable interest entity of $438,099 and none, a decrease in accounts receivable

of $930,893 and $2,613,278, a decrease in accounts payable of $366,592 and $3,408,157, an increase in other assets of $417,890 and $80,220.

For the years ended December 31, 2023 and 2022, we were also able to issue stock for services of none and $1,472,888, and stock-based

compensation of $1,597,881 and $2,606,703 in lieu of using cash.

We also realized interest expense on loans and notes payable of $3,476,577

and $1,454,752 related to the original $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.

2023 and 2022, we also realized an unrealized loss of $1,156,928 and $578,464 on marketable securities as described above.

For the years ended December 31, 2023

and 2022, our net cash used in investing activities was mainly attributed to our purchase of equipment of $3,320,918 and $2,491,175 related

to the manufacturing of our RPCs and wash plant facilities.

The Company also reported $210, 862 of notes receivable assumed and a decrease

in $181,509 of cash and cash equivalents in the deconsolidation of a variable interest entity and as of December 31, 2023.

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.

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;

anticipate further construction costs of approximately $1.7 million in connection with our construction in process of our RPC Series A

and construction for each Nanosponge costs approximately $200,000, and we intend to manufacture and add a Nanosponge to our current

and future RPCs.

the years ended December 31, 2023 and 2022, we received proceeds of $2,944,697 and $3,640,046 related to the issuance of notes

and other loans.

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, 2023 and 2022, we paid down notes payable and related party notes

payable by $470,160 and $853,230 and made distributions to Viva Wealth Fund I, LLC unit holders of none and $861,691.

For the years

ended December 31, 2023 and 2022, we paid down finance lease liabilities by $446,782 and $429,578.

are no further existing firm obligations;

however, we anticipate construction for each Nanosponge costs approximately $200,000,

and we intend to manufacture and add a Nanosponge to our current RPCs.

We have historically suffered net losses and cumulative

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of December 31, 2023 and 2022, we had a working capital deficit of approximately $34.9 million and $3.77 million, respectively.

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.

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.

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

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.

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.

lease obligations as of December 31, 2022 are as follows:

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

Operating lease obligations as of December 31, 2022 are as follows:

of December 31, 2023, we had cash of approximately $744,000.

In addition, we have obligations to pay approximately $18.1 million

of debt within one year of the issuance of these financial statements.

Of the $18.1 million, $15.3 million can be satisfied through

the issuance of registered common stock under the terms of the debt.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

During the year ended December 31, 2023, subject

to available cash flows, the Company continued to develop its technologies, its strategy to monetize its intellectual properties and

execute its business plan.

To date we have financed our operations primarily through debt financing, private and public equity

offerings and our working interest agreements.

For the fiscal year 2023 we raised approximately $3 million through debt financings

with individual investors, $2.2M through a sale lease back agreement, and subsequent to year end we raised an additional $3 million

through additional debt financing (Note 22).

The Company entered into merger and acquisition agreements with anticipated closing

dates in 2024 (Note 22).

Even though these merger and acquisition transactions are projected to close in 2024 and yield substantial

cash flow that may provide adequate working capital to finance its day-to-day operations and current obligations, these events were

not considered probable as of December 31, 2023 because they have not closed as of the date of our filing.

Based on the above, we believe there is substantial doubt about the

Company’s ability to continue as a going concern.

The Company has prepared the consolidated financial statements on a going concern

If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required

to take various measures to conserve liquidity.

Management cannot provide any assurance that the Company will be able to execute its plans

to raise additional capital, close its merger and acquisitions, or that its operations or business plan will be profitable.

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.

such a case, we may need to suspend site and plant construction or further acquisitions until market conditions improve.

contractual obligations as of December 31, 2023 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, 2023 are as follows:

contractual obligations as of December 31, 2023 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, 2023 are

Rate and Market Risk

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.

that the LIBOR is being phased out globally and do not have any financings with variable interest rates based on the LIBOR.

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.

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.

Risk — Equity Investments

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.

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.

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.

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.

Inflation could cause both our investment and cost of revenue to increase, thereby lowering our return on investment and depressing

our gross margins.

Balance Sheet Arrangements

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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.

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.

- Quantitative and Qualitative Disclosures About Market Risk

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, 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.

7A - Quantitative and Qualitative Disclosures About Market Risk

8 - Financial Statements and Supplementary Data

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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-K

Item 5. Market for Registrant’s Common Equity