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Item 1. Financial Statements

2024-05-20 compared with 2023-11-20 · 306 added, 355 removed, 230 unchanged (74% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

Cash and cash equivalents

Cash and cash equivalents attributed to variable interest entity

Accounts receivable

4 unchanged sentences

Other investments

Notes receivable

Property and equipment, net

11 unchanged sentences

Loans and notes payable, current- related parties

Loans and notes payable, current attributed to variable interest entity

Loans and notes payable, current attributed to variable interest entity- related parties

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

Total current liabilities

3 unchanged sentences

Loans and notes payable, long term- related parties

Loans and notes payable attributed to variable interest entity- related party

Long-term debt (working interest royalty programs)

Deferred tax liability

Total liabilities

Stockholders’ equity:

Convertible preferred stock, $ 0.001 par value;

Preferred stock, $ 0.001 par value;

15,000,000 shares authorized, none outstanding

1 unchanged sentence

200,000,000 shares authorized;

18,219,582 and 18,064,838 were issued and outstanding as September 30, 2023 and December 31, 2022, respectively

26,520,508 and 26,220,508 were issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

( 67,790,641 )

( 65,908,406 )

Total Vivakor, Inc.

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30,

Nine Months Ended

September 30,

Product revenue - third parties

8 unchanged sentences

Loss from operations

( 1,616,922 )

( 1,124,872 )

Other income (expense):

Unrealized gain (loss) on marketable securities

Gain on disposition of asset

Unrealized loss on marketable securities

on deconsolidation of subsidiary

Interest income

2 unchanged sentences

Total other income (expense)

( 1,691,495 )

Loss before provision for income taxes

( 1,909,743 )

( 2,816,367 )

Provision for income taxes

Consolidated net loss

( 1,910,543 )

( 2,817,167 )

Net loss attributable to noncontrolling interests

Net loss attributable to Vivakor, Inc.

$ ( 1,882,235 )

$ ( 2,534,592 )

Basic and diluted net loss per share

5 unchanged sentences

Non-controlling

Total Stockholders’

June 30, 2023 (unaudited)

Issuance of common stock for a reduction of liabilities

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

Stock based compensation

September 30, 2023 (unaudited)

Preferred Stock

Non-controlling

Total Stockholders’

Stockholders’

December 31, 2023

Issuance of common stock for a reduction of liabilities

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

Non-qualified stock options issued to third party

Stock based compensation

September 30, 2023 (unaudited)

Preferred Stock

Non-controlling

Total Stockholders’

June 30, 2022 (unaudited)

Common Stock issued for stock awards

Common stock issued as part consideration for the purchase of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC

Stock options issued for services

$ ( 65,908,406 )

Issuance of common stock for

a reduction of liabilities

Stock based compensation

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

September 30, 2022 (unaudited)

( 1,882,235 )

( 1,910,543 )

March 31, 2024 (unaudited)

$ ( 67,790,641 )

Preferred Stock

Non-controlling

Total Stockholders’

Stockholders’

December 31, 2022

Common Stock issued for stock awards

Common Stock issued for a reduction of liabilities

Conversion of Series A Preferred Stock to Common Stock

Common Stock issued for cash

Common stock issued for fractional shares from reverse stock split

Common stock issued as part consideration for the purchase of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC

Stock options issued for services

Stock based compensation

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

September 30, 2022 (unaudited)

Share and per share amounts have been retroactively adjusted to reflect the one-for-thirty reverse stock split effective February 14, 2022.

See Note 1 – Organization and Basis of Presentation for additional information.

$ ( 55,169,781 )

Distributions by noncontrolling

Issuance of noncontrolling

interest for a reduction of debt

( 2,534,592 )

( 2,817,167 )

March 31, 2023 (unaudited)

$ ( 57,704,373 )

See accompanying notes to consolidated financial statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

OPERATING ACTIVITIES:

Consolidated net loss

$ ( 1,910,543 )

$ ( 2,817,167 )

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

Depreciation and amortization

Forgiveness of liabilties

Common stock options issued for services

Forgiveness of liabilities

Stock-based compensation

Unrealized (gain)/loss- marketable securities

Gain on disposal of asset

Unrealized loss- marketable securities

Gain on deconsolidation of variable interest entity

Changes in operating assets and liabilities:

Accounts receivable

( 1,551,490 )

Prepaid expenses

1 unchanged sentence

Right of use assets- operating leases

Financing lease liabilities

Operating lease liabilities

Accounts payable and accrued expenses

( 1,775,681 )

Interest on notes receivable

1 unchanged sentence

Net cash used in operating activities

( 1,829,679 )

( 1,276,123 )

INVESTING ACTIVITIES:

Proceeds from notes receivable

Acquisition of assets

Proceeds from disposal of equipment

Purchase of equipment

( 1,028,885 )

Net cash used in investing activities

( 1,028,885 )

FINANCING ACTIVITIES:

2 unchanged sentences

Proceeds from loans and notes payable- related party

Proceeds from sale of common stock

Payment of notes payable

Payment of notes payable- related party

7 unchanged sentences

Noncash transactions :

Conversion of Series A, B, B-1, and C-1 Preferred Stock to Common Stock

Common stock issued for a reduction in liabilities

Accounts payable on purchase of equipment

1 unchanged sentence

Capitalized interest on construction in process

Common stock issued in the acquisition of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC

Non-qualified stock options issued with debt

Equity issued with debt

Note receivable received in exchange for sale of subsidiary

See accompanying notes to consolidated financial statements

2 unchanged sentences

Basis of Presentation

On February 14, 2022, we effected a 1-for-30 reverse split of our outstanding shares of common stock (the “Reverse Stock Split”) via the filing of a certificate of change with the Nevada Secretary of State which was effective at the commencement of trading of our Common Stock.

No fractional shares of the Company’s common stock were issued as a result of the Reverse Stock Split.

Any fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share.

All issued and outstanding common stock, preferred stock, and per share amounts in the consolidated financial statements and footnotes included herein have been retroactively adjusted to reflect this reverse stock split for all periods presented.

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 had a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets.

states and many countries issued policies intended to stop or slow the 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.

Additionally, we continue to experience supply chain disruptions related to building our Remediation Processing Centers (“RPC”), completing certain refurbishment, and in relation to our other operations.

Interim Financial Information

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

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

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

The accompanying unaudited condensed

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

America (“U.S.

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

Exchange Commission (“SEC”).

Certain information and disclosures normally included in consolidated financial statements

prepared in accordance with U.S.

GAAP have been condensed or omitted.

Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2022.

The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements.

The operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023.

Accordingly, these condensed consolidated financial statements

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

December 31, 2023 that were filed with our Form 10-K.

The unaudited condensed consolidated financial statements have been

prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the

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

condensed consolidated financial statements.

The operating results for the three months ended March 31, 2024 are not

necessarily indicative of the results expected for the full year ending December 31, 2024.

Deconsolidation of VivaSphere

On September 7, 2023 we entered into an

Acquisition Agreement (the “Agreement”) to sell 100% of the common stock of VivaSphere, Inc.

(“VivaSphere”)

and its assets, which were completely impaired by the Company in the fiscal year 2022, to a private buyer.

The transaction closed on

February 15, 2024.

Under the terms of the Agreement, the purchase price of approximately $ 7.5

million consists of a promissory note payable (the “Convertible Note”) to the Company payable in full four years after

the closing date, and the note is convertible into shares of the buyer’s common stock after it becomes a public company.

the event the buyer does not close a transaction with a public company within one year from the close of the transaction, then the

Company has the right to foreclose on and repossess the assets.

The Convertible Note is convertible into common shares, which has a

ceiling of 17.99% of the total number of shares outstanding.

The “Conversion Price” shall equal the greater of (a) $0.75

per share or (b) the lesser of (i) 90% of the volume weighted average price for the Common Stock trade occurring during the ten (10) consecutive

trading days of the Common Stock immediately preceding the applicable Conversion Date on which the Company elects to convert all or part

of this Note or (ii) $2.25 per share.

Due to uncertainty of the collectability of the principal amount of the

Convertible Note, we have established an allowance for the entire amount, and we have not

accrued any interest receivable in connection with the Convertible Note.

In accordance with ASC 810, as of

October 1, 2023, we deconsolidated Viva Wealth Fund I, LLC (VWFI), recognizing a gain on deconsolidation of $ 438,099

in the fourth quarter of fiscal year 2023, and as of February 15, 2024 we deconsolidated Vivasphere, Inc.

(Vivasphere), recognizing

a gain of $ 177,550

for the three months ended March 31, 2024.

The assets, liabilities and equity related to VWFI and Vivasphere were removed from

our financial statements on their respective deconsolidation dates, resulting in the gains on deconsolidation.

Long Lived Assets

1 unchanged sentence

If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset.

During the nine months ended September 30, 2023, the Company entered into an agreement to move the Vernal RPC plant to Kuwait to service the contract with DIC for a scaled up RPC, as the Vernal plant was not producing product toward the off-take agreement, which further delayed scaled operations.

The Company evaluated these events, and determined that there was no trigger event, and therefore there was no impairment incurred during the nine months ended September 30, 2023.

For the three months ended March 31, 2024, the Company continued to build its wash plant to commence operations at its Houston, Texas site.

The Company evaluated, and determined that there was no trigger event, and therefore there was no impairment incurred during the three months ended March 31, 2024.

There can be no assurance that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.

7 unchanged sentences

The term more likely than not refers to a level of likelihood that is more than 50 percent.

We performed an analysis and assessed no triggering event has occurred, and no impairment for the nine months ended September 30, 2023.

We performed an analysis and assessed no triggering event has occurred, and no impairment for the three months ended March 31, 2024.

Revenue Recognition

In August 2022, we acquired Silver Fuels Delhi, LLC and White Claw Colorado City, LLC, from which approximately 99 % of the Company’s revenue is derived.

For the nine months ended September 30, 2023, our sales consist of storage services and the sale of crude oil or like products.

For the nine months ended September 30, 2023, disaggregated revenue by customer type was as follows:

For the three months ended March 31, 2024, our sales consist of storage services and the sale of crude oil or like products.

For the three months ended March 31, 2024, disaggregated revenue by customer type was as follows:

$ 12,913,165 in crude oil sales and $ 2,657,906 in product related to natural gas liquids sales.

2 unchanged sentences

We acquired these contracts in our August 1, 2022 acquisition of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC.

These contracts were entered into in the normal course of our business.

Our revenue from related parties for the nine months ended September 30, 2023 and 2022 was $ 9,834,095 and $ 2,883,870 .

Our revenue from related parties for 2024 and 2023 was $ 2,657,906 and $ 4,350,405 .

Major Customers and Concentration of Credit Risk

The Company has two major customers, which account for approximately 97 % of the balance of accounts receivable as of September 30, 2023 and December 31, 2022.

The Company has two major customers, which account for approximately 100 % of the balance of accounts receivable as of March 31, 2024 and 2023.

Our two major customers (one of which is a related party) account for approximately 99 % of the Company’s revenues for the three months ended March 31, 2024 and 2023.

Advertising Expense

Advertising costs are expensed as incurred.

The Company did no t incur advertising expense for the nine months ended September 30, 2023 and 2022.

The Company did no t incur advertising expense for the three months ended March 31, 2024 and 2023.

Net Income/Loss Per Share

1 unchanged sentence

Diluted net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method if their effect is dilutive.

Potential dilutive instruments as of September 30, 2023 and December 31, 2022 include the following:

convertible notes payable convertible into approximately 214,560 and 14,560 shares of common stock, stock options and unissued stock awards granted to current or previous employees of 2,590,968 and 1,421,760 shares of common stock, stock options and unissued awards granted to Board members or consultants of 680,274 and 395,139 shares of common stock.

The Company issued free standing stock options to purchase 1,000,000 shares of our common stock to a third party in a bundled transaction with debt during the nine months ended September 30, 2023 (see Note 9).

The Company also has a warrant outstanding to purchase 80,000 shares of common stock as of September 30, 2023.

Potential dilutive instruments have been excluded from the calculation of the weighted-average number of common shares outstanding when the Company is in a net loss position.

For the three months March 31, 2024 and 2023 our potential dilutive instruments were excluded from the weighted-average calculation as they were antidilutive.

Potential dilutive instruments as of March 31, 2024 and 2023 include the following:

convertible notes payable convertible into approximately 224,560 and 14,560 shares of common stock, stock options and awards granted to previous and current employees of 2,281,673 and 1,421,760 shares of common stock, stock options and awards granted to Board members or consultants of 690,304 and 395,139 shares of common stock.

The Company issued free standing stock options to purchase 1,000,000 shares of our common stock to a third party in a bundled transaction with debt during 2023 (see Note 9).

The Company also has a warrant outstanding to purchase 80,000 shares of common stock as of March 31, 2024 and 2023.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

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, cost basis investments, lease assets and liabilities, valuation of stock used to acquire assets, derivatives, and fair values of the intangible assets and goodwill related to business combinations.

The preparation of financial statements in conformity

with accounting principles generally accepted in the United States of America requires management to make estimates, judgments, and assumptions

that affect the amounts reported in the consolidated financial statements and accompanying notes.

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, lease assets and liabilities, valuation of stock used to acquire assets, derivatives, and fair values of the

intangible assets and goodwill.

While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions.

16 unchanged sentences

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

We have historically suffered net losses and cumulative negative cash flows from operations, and as of September 30, 2023, we had an accumulated deficit of approximately 62,066,420 $62.1 million.

As of September 30, 2023 and December 31, 2022, we had a working capital deficit of approximately $ 19 million and $ 3.7 million, respectively.

Subsequent to September 30, 2023, $ 10 million of the working capital deficit was paid with an issuance of common stock for a reduction in noted payable to a related party, of which our CEO is a beneficiary (see Note 12).

As of September 30, 2023, we had cash of approximately $ 1.2 million, and we had obligations to pay approximately $14.4 million (of which approximately $10 million was satisfied through the issuance of our common stock under the terms of the debt subsequent to September 30, 2023 (see Note 12)) of debt in cash within one year of the issuance of these financial statements.

Our CEO has also committed to provide credit support through December 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.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

We believe the liquid assets and CEO commitment give us adequate working capital to finance our day-to-day operations for at least twelve months through November 2024.

Going Concern & Liquidity

We have historically suffered net losses and

cumulative negative cash flows from operations, and as of March 31, 2024, we had an accumulated deficit of approximately

( 67,790,641 ) $67.8 million.

As of March 31, 2024 and 2023, we had a working capital deficit of approximately $ 37 million and

$ 6.4 million, respectively.

As of March 31, 2024, we had cash of approximately $ 767 thousand.

As of March 31, 2024, we

have current obligations to pay approximately $20.4 million of debt.

Of the $20.4 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 three months ended March 31, 2024, 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, $2.2 million through a sale lease back agreement, and during the three months ended March 31, 2024, we raised an additional $3 million through additional debt financing (Note 9).

The Company entered into merger and acquisition agreements with anticipated closing dates in 2024, which were disclosed with our Form 10-K.

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 March 31, 2024 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 basis.

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 raise additional capital if needed.

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.

Accounts receivable

As of September 30, 2023 and December 31, 2022, accounts receivable with related parties was $ 174,083 and $ 948,352 and is made up of the following:

As of September 30, 2023 and December 31, 2022, trade accounts receivable of $ 112,083 and $ 948,352 are with a vendor of which our CEO is a beneficiary.

In 2023 we began subleasing office space to a tenant where the officers of WealthSpace, LLC, Fund Manager of Viva Wealth Fund I, LLC, also manage the tenant of our sublease.

The tenant owes rent of $ 62,000 to the Company as of September 30, 2023.

As of March 31, 2024 and December 31, 2023,

an allowance for doubtful accounts of none was deemed necessary.

As of March 31, 2024 and December 31, 2023, trade accounts

receivable of $ 82,227

and $ 152,083

are with a vendor of which our CEO is a beneficiary.

In 2023 we began subleasing office space to a tenant where the officers of

WealthSpace, LLC, Fund Manager of Viva Wealth Fund I, LLC, also manage the tenant of our sublease.

The tenant owes rent of $ 76,000

to the Company as of March 31, 2024.

Prepaid Expenses and Other Assets

As of March 31, 2024 and December 31,

2023, we had other assets of $ 1,233,930

and $ 1,118,188 .

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

leases, including operating lease deposits in the amount of $ 292,249 and $ 214,500

as of March 31, 2024 and December 31, 2023, a deposit for a reclamation bond with the Utah Division of Oil, Gas and Mining

in the amount of $ 14,288

as of March 31, 2024 and December 31, 2023, and finance lease deposits of $ 941,680

and $ 889,400

as of March 31, 2024 and December 31, 2023, which will be returned at the end of the finance leases after we have complied

with the terms of the lease.

As of March 31, 2024 and December 31, 2023, our prepaid expenses of $ 166,269 and $ 74,876 mainly consists of prepaid insurances.

As of March 31, 2024 and December 31, 2023 and 2022, inventories of $ 57,780 and $ 44,632 consist of crude oil.

The crude oil is related to our oil gathering facility in Delhi, Louisiana.

Property and Equipment

The following table sets forth the components of the Company’s property and equipment at September 30, 2023 and December 31, 2022:

The following table sets forth the components of the Company’s property and equipment at March 31, 2024 and December 31, 2023:

Schedule of property and equipment, net

September 30,

Office furniture

Finance lease- Right of use assets

Construction in process:

Wash Plant Facilities

Cavitation device

Remediation Processing Unit 1

Remediation Processing Unit 2

Remediation Processing Unit System A

Remediation Processing Unit System B

Total fixed assets

For the nine months ended September 30, 2023 and 2022 depreciation expense was $ 111,452 and $ 500,352 .

For the nine months ended September 30, 2023 and 2022 capitalized interest to equipment from debt financing was $ 735,919 and $ 499,537 .

March 31, 2024

December 31, 2023

lease- Right of use assets

Plant Facilities

Processing Unit 1

Processing Unit 2

Processing Unit System A

Processing Unit System B

Tank Expansion

For the three months ending March 31, 2024 and 2023, depreciation expense was $ 37,151 .

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

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

The operations surrounding our precious metals extraction services were temporarily 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 realized an impairment loss of $ 6,269,998 surrounding the extraction machinery for the year ended December 31, 2022.

As of December 31, 2022 we continued to pursue a test facility or third party reactor for our nano catalyst technology that facilitates chemical manufacturing, with a focus on the production of ammonia, which includes our bioreactor equipment.

The Company received quotes for testing or building our own test facilities with new partners for this venture.

After taking into consideration this new information, we noted that the newly requested capital expenditure to test and scale the business triggered an impairment loss of assets related to our ammonia synthesis assets, including our bioreactors.

The impairment loss related to our bioreactors was $ 1,440,000 for the year ended December 31, 2022.

There was no impairment loss during the nine months ended September 30, 2023.

Intellectual Property, Net and Goodwill

The following table sets forth the components of the Company’s intellectual property at September 30, 2023 and December 31, 2022:

Intangible Assets, Net and Goodwill

The following table sets forth the components of the Company’s intangible assets at March 31, 2024 and December 31, 2023:

Schedule of components of intellectual property

September 30,

March 31, 2024

December 31, 2023

Extraction Technology patents

1 unchanged sentence

Acquired crude oil contracts

Total Intellectual property

Total intangible assets

The changes in the carrying amount of goodwill are as follows:

1 unchanged sentence

January 1, 2023

September 30, 2023

There were no changes in goodwill for the nine months ended September 30, 2023.

On August 1, 2022, the Company closed a Membership Interest Purchase Agreement, (the “MIPA”), with Jorgan Development, LLC, and JBAH Holdings, LLC, as the equity holders of Silver Fuels Delhi, LLC, a Louisiana limited liability company (“SFD”) and White Claw Colorado City, LLC, a Texas limited liability company (“WCCC”) whereby, the Company acquired all of the issued and outstanding membership interests in each of SFD and WCCC making SFD and WCCC wholly owned subsidiaries of the Company.

The purchase price for the Membership Interests is approximately $ 32.9 million, after post-closing adjustments.

Management hired a valuation expert who performed a valuation study to calculate the fair value of the acquired assets, assumed liabilities and goodwill.

Based on the valuation study, the fair values of goodwill and the acquired contracts were $ 14,984,768 and $ 16,788,760 on August 1, 2022.

Amortization expense for the nine months ended September 30, 2023 and 2022 was $ 2,157,993 and $ 1,553,198 .

Business combination acquisition (1)

December 31, 2023

March 31, 2024

(1) 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.

hired a valuation expert who performed a valuation study to calculate the fair value of the acquired assets, assumed liabilities and

goodwill within twelve months.

Based on the valuation study, we increased the fair value of goodwill and decreased the value of the acquired

contracts by $2.3 million in 2023.

Accounts Payable and Accrued Expenses

1 unchanged sentence

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

Office access deposits

Unearned revenue

3 unchanged sentences

Accounts payable and accrued expenses

September 30,

Accounts payable- related parties

Accrued interest (notes payable)- related parties

Accounts payable and accrued expenses

of accounts payable and accrued expenses related parties

Accounts payable and accrued expenses- related parties

Accrued compensation

As of September 30, 2023 and December 31, 2022, our accounts payable are primarily made up of trade payables for the purchase of crude oil.

As of September 30, 2023 and December 31, 2022, trade accounts payables in the amount of $ 2,842,979 and $ 4,000,681 is with a vendor who our CEO is a beneficiary of.

As of September 30, 2023 and December 31, 2022, $ 250,526 and $ 37,685 of accounts payable is related to services rendered, which are not trade payables, with a vendor of which our CEO is a beneficiary.

In March 2023, the Compensation Committee reviewed the Company’s 2022 results, including, but not limited to, the progress of the Company’s historic business and certain acquisitions completed by the Company during 2022, and approved discretionary bonuses, which have been accrued as of December 31, 2022, for the Chief Financial Officer, and an acquisition consultant, in the amounts of $ 505,467 (included in accrued compensation) and $ 421,222 (included in accounts payable), respectively.

As of September 30, 2023, accrued compensation to current employees includes $ 71,005 in accrued vacation pay due to our Chief Executive Officer, which may be payable in cash or stock if unused, and $ 720,145 due to our Chief Financial Officer, with $ 54,183 in accrued sick and vacation pay that may be payable in cash if unused, and the remainder paid in cash.

On May 23, 2023, our subsidiary White Claw Colorado City, LLC (“WCCC”), supplemented an existing Master Agreement (the “Master Agreement”) with Maxus Capital Group, LLC (“Maxus”), under a two year agreement, which Maxus agreed to finance the build-out of our new facility located on the land leased by our subsidiary, VivaVentures Remediation Corp., in Houston, Texas.

We expect Maxus to fund approximately $2.2 million to finance the build-out of the Houston location in the form of a finance lease (see Note 8) for the wash plant, and we will lease the wash plant facility financed by Maxus under WCCC’s supplement to the Master Agreement.

During the construction phase of this agreement, the Company controls the asset with construction costs funded by Maxus recorded as a liability.

As of September 30, 2023 the Company has recorded a $ 1,564,771 liability in accounts payable related to the construction related to this agreement that has been funded by Maxus.

In July 2023, the Fund Manager, WealthSpace, LLC, of Viva Wealth Fund I, LLC (VWF), paid distributions to LLC unit holders in the amount of $414,329.

The Company recorded this payment in behalf of VWF in accounts payable as of September 30, 2023.

Subsequent to September 30, 2023, the $ 414,329 payable to WealthSpace, LLC was reimbursed by VWF and the payable was eliminated.

As of March 31, 2024 and December 31, 2023, our accounts payable are primarily made up of trade payable for the purchase of crude oil.

Trade accounts payables in the amount of $ 3,433,706 and $ 1,933,817 is with a vendor who our CEO is a beneficiary of.

As of March 31, 2024 and December 31, 2023, accounts payable related to services rendered of $ 252,777 and $ 178,325 , which are not trade payables, are with a vendor who our CEO is a beneficiary of.

As of March 31, 2024, accrued compensation to current employees includes $ 109,467 in accrued vacation pay due to our Chief Executive Officer, which may be payable in cash or stock if unused, and $ 1,176,491 due to our Chief Financial Officer, with $ 62,260 in accrued sick and vacation pay that may be payable in cash if unused, and the remainder paid in cash.

On March 8, 2024, we gave our Chief Financial Officer formal notice that his current employment agreement will terminate on June 8, 2024 in accordance with its terms.

We are currently negotiating with him regarding extending his employment beyond June 8, 2024.

If we are not able to successfully negotiate a new employment agreement with Mr.

Nelson then the non-renewal of his employment agreement constitutes a termination for good reason under Mr.

Nelson’s employment agreement and triggers the following payment/performance obligations under the employment agreement:

Monthly severance payments of the executive’s then base salary for 12 months commencing June 9, 2024.

All accrued, unused vacation and accrued compensation (or $1,176,491 as of March 31, 2024) is due and payable in one lump sum cash payment to the executive on June 8, 2024.

We will continue to reimburse the executive for his executive healthcare benefits for 12 months or pay for COBRA coverage until the earlier of the expiration of 12 months, the expiration of COBRA coverage, or the date when the executive becomes eligible for substantially equivalent healthcare coverage with new employment.

We will pay for the executive’s benefit for outplacement services for 12 months with an outplacement firm selected by the executive.

100% of the executives then unvested stock option shares vest and become fully exercisable for a period of 3 years following the termination date.

Loans and Notes Payable

Loans and notes payable and their maturities consist of the following:

Third party debt:

Schedule of loans and notes payable

September 30,

Various promissory notes and convertible notes

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National Buick GMC

Blue Ridge Bank

Blue Ridge Bank (d)

Small Business Administration

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Trading & Cont.

Various variable interest promissory notes (d)

Cedarview Opportunities Master Fund LP (c)

Total notes payable

Loans and notes payable, current

Loans and notes payable, current attributed to variable interest entity

Loans and notes payable, long term

Related party debt:

Schedule of loans and notes payable related parties

September 30,

Various variable interest promissory notes- related parties (c)

Jorgan Development, LLC

Various variable interest promissory notes- related parties

Jorgan Development, LLC (b)

Triple T Notes

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Loans and notes payable, current- related parties

Loans and notes payable, current attributed to variable interest entity- related parties

Loans and notes payable attributed to variable interest entity- related parties

Loans and notes payable, long term- related parties

The following table sets forth the estimated payment schedule of long-term debt (net of debt discount) as of September 30, 2023:

Schedule of maturities of loans and notes payable

In 2017, the Company acquired assets, including patents, in the amount of $4,931,380 in which the Company also agreed to assume the encumbering debt in the amount of $334,775.

The debt currently accrues interest at 10% per annum.

In November 2021, the lender agreed to extend the maturity of the note to April 1, 2022.

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

As of the date of this report, we are currently renegotiating the terms of this debt.

On June 20, 2023, we issued a 15% secured promissory note due to Al Dali International for Gen.

Trading & Cont.

Co., a company organized under the laws of Kuwait (“DIC”), in the principal amount of up to $1,950,000.

As security to secure repayment of the Note, we issued DIC an option to purchase 1,000,000 shares of our common stock at an exercise price of $1.179 per share, which was recorded as a debt discount in the amount of $467,509, which is amortized to interest expense over the term of the agreement using the effective interest method.

We also granted DIC a security interest in our Trial Remediation Processing Center (“RPC”) that is currently on-site at the DIC facility in Kuwait.

We will repay the amounts due under the note from the operations of the RPC.

In order to repay the amounts due under the note, DIC will deduct $12 per ton of material we process from the amounts due to us until all amounts due under the note have been repaid.

On July 25, 2023, RSF, LLC loaned the Company $500,000 under the terms of a 10% Convertible Promissory Note.

Under the terms of the note, interest accrues at 10% per annum, and matures two years from the date of issuance.

The note is convertible into shares of our common stock at $2.50 per share, unless such conversion would cause the investor to own more than 4.9% of our outstanding common stock.

The balance of these various promissory notes are related to the special purchase vehicle, Viva Wealth Fund I, LLC (VWFI) of which the balance primarily related to an offering up to $25,000,000 in convertible notes in a private offering, which was closed on March 31, 2023.

During the nine months ended September 30, 2023, an additional $1,980,000 has been raised in relation this offering, and $3,305,000 of this debt has been converted into units of the LLC.

VWFI has also entered into various master revolving notes outside of the offering:

an additional $765,000, was raised from a related party as of September 30, 2023, which accrues 6% interest per annum, has a maturity date of October 11, 2024, where no payments are made prior to the maturity date unless at the option of the fund.

For the nine months ended September 30, 2023, we made a cash payment of $12,655 on the principal of the revolving note.

Commitments and Contingencies

Finance Leases

We acquired Silver Fuels Delhi, LLC (SFD) and White Claw Colorado City, LLC (WCCC) in a business combination in August 2022, in which we acquired certain finance lease contracts and liabilities as described below:

On March 17, 2020, SFD entered into two sale and leaseback transactions with Maxus Capital Group, LLC (“Maxus”).

The first transaction involved the Company assigning twelve storage tanks and other equipment and the second transaction involved the Company assigning the remaining property at the oil gathering facility with the exception of land, to Maxus Future minimum lease payments for each of the next three years under the Maxus lease obligations is as follows:

2023 $ 123,036 , 2024 $ 492,144 , and 2025 $ 123,036 .

On December 28, 2021, WCCC entered into a sale and leaseback transaction with Maxus, where WCCC assigned the crude oil, natural gas liquids, condensate, and liquid hydrocarbon receipt, throughput, processing, gathering, and delivery terminal, commonly known as the China Grove Station (the “China Grove Station”), located in Colorado City, Texas to Maxus.

Future minimum lease payments for each of the next four years under the Maxus lease obligation are as follows:

2023 $ 117,939 , 2024 $ 471,756 , 2025 $ 471,756 , and 2026 $ 471,756 .

We expect Maxus to fund approximately $2.2 million to finance the build-out of the Houston location in the form of a finance lease for the wash plant, and we will lease the wash plant facility financed by Maxus under WCCC’s supplement to the Master Agreement.

We expect our lease payments to Maxus under the supplement to be approximately $57,962 per month over 4 years, with an early buyout option of approximately $685,000 or lease-end option to purchase the facilities for the fair market value.

We anticipate that the lease will commence in the fourth quarter of 2023 at which time the final amount funded and lease payments will be determined.

During the construction phase the Company controls the asset with construction costs funded by Maxus recorded as a liability (see Note 6).

The following table reconciles the undiscounted cash flows for the finance leases as of September 30, 2023 to the finance lease liability recorded on the balance sheet:

Schedule of financing lease liability

Total undiscounted lease payments

Imputed interest

Present value of lease payments

carrying value of lease obligation at end of lease term

Total finance lease obligations

Finance lease liabilities, current

Finance lease liabilities, long-term

Weighted-average discount rate

Weighted-average remaining lease term (months)

Operating Leases

Commencing on September 15, 2019, the Company entered into a five-year lease with Jamboree Center 1 & 2 LLC covering approximately 6,961 square feet of office space in Irvine, CA.

Under the terms of the lease agreement, we are required to make the following monthly lease payments:

Year 1 $ 21,927 , Year 2 $ 22,832 , Year 3 $ 23,737 , Year 4 $ 24,712 , Year 5 $ 25,686 .

As a condition of the lease, we were required to provide a $ 51,992 security deposit.

On February 1, 2022, the Company entered into a lease agreement for approximately 2,533 square feet of office and manufacturing space located in Las Vegas, Nevada.

Commencing on March 1, 2022, the Company entered into a three-year lease with Speedway Commerce Center, LLC.

Under the terms of the lease agreement, we are required to make the following monthly lease payments:

Year 1 $ 2,258 , Year 2 $ 2,336 , Year 3 $ 2,418 .

As a condition of the lease, we were required to provide a $ 2,418 security deposit.

On March 28, 2022, the Company entered into a lease agreement for approximately 1,469 square feet of office space located in Lehi, Utah.

Commencing on April 1, 2022, the Company entered into a three-year lease with Victory Holdings, LLC.

Under the terms of the lease agreement, we are required to make the following monthly lease payments:

Year 1 is comprised of April to May 2022 $857, June 2022 to March 2023 $3,550, Year 2 $3,657, Year 3 $3,766.

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

On December 16, 2022, our subsidiary, VivaVentures Remediation Corp.

entered into a Land Lease Agreement (the “Land Lease”) with W&P Development Corporation, under which we agreed to lease approximately 3.5 acres of land in Houston, Texas.

The Land Lease is for an initial term of 126 months and may be extended for an additional 120 months at our discretion.

Our monthly rent is $0 for the first three months and then at month 4 it is approximately $7,000 (based on a 50% reduction) and increases to approximately $13,000 in month 7 and then increases annually up to approximately $16,000 per month by the end of the initial term.

We plan to place one or more of our RPC machines on the property, as well as store certain equipment.

On June 26, 2023, our subsidiary VivaVentures Remediation Corp., entered into a five year RPC Equipment Lease Agreement with Viva Wealth Fund I, LLC (“VWF”), under which VivaVentures Remediation Corp.

agreed to lease the Remediation Processing Center (“RPC”) owned by VWF.

VWF previously raised approximately $13.7 million and used the funds to have our subsidiary, RPC Design and Manufacturing, LLC, build an RPC, which we are now leasing from VWF in exchange for 25% of the gross proceeds from the RPC’s oil extraction production services, with a minimum $400,000 annual payment beginning nine months after the RPC is fully operational as defined in the RPC Equipment Lease Agreement.

We anticipate that the RPC will be fully operational in the fourth quarter of 2023 at which time the minimum annual lease payment of $400,000 and could increase to an amount equal to 25% of the gross proceeds from the RPC’s oil extraction production services.

In July and August 2023, the Company entered into two six month lease agreements with Regus Management Group, LLC for individual offices and shared amenities located in Laguna Hills, California.

The leases require an aggregate monthly lease payment of $3,080.

The following table reconciles the undiscounted cash flows for the leases as of September 30, 2023 to the operating lease liability recorded on the balance sheet:

Schedule of lessee operating lease liability

Total undiscounted lease payments

Imputed interest

Present value of lease payments

Operating lease liabilities, current

Operating lease liabilities, long-term

Weighted-average remaining lease term

Weighted-average discount rate

Employment Agreement

On July 1, 2023, we hired a Vice President of Operations & Construction.

In this position, Mr.

Patterson is in charge of managing the development and operations for our facilities.

In connection with his hiring we signed an Executive Employment Agreement with Mr.

Under the terms of the Agreement, Mr.

Patterson will receive $ 150,000 in annual salary, shares of our common stock equal to $25,000 annually, and two one-time bonuses of shares of our common stock equal to $125,000 each, with the first bonus payable on the one year anniversary of his employment, and the second bonus payable on the eighteen month anniversary of his employment agreement.

Patterson is entitled to other bonuses and benefits on par with our general employment policies.

(a) As of the date of this report, this note encumbered our ammonia

synthesis assets, which were sold on February 15, 2024, and the Company was released by the lender from this liability.

(b) On August 1, 2022, we closed a Membership Interest Purchase

Agreement, (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC (“JBAH”),

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, making SFD and WCCC wholly owned

subsidiaries of the Company.

On March 31, 2024, we entered into an agreement with the lender, who is controlled by our Chief Financial

Officer, that the Threshold Payment date, which was originally February 1, 2024, was extended to February 1, 2025.

Additionally,

the Threshold Payment as defined in the MIPA, and the corresponding right of the sellers in the MIPA transaction to unwind the MIPA transaction,

will expire upon the earliest to occur of (a) payment of the Threshold Payment in full on or before February 1, 2025, (b) the closing

of the proposed merger transaction with Empire, or (c) the closing of the proposed acquisition of the Endeavor entities.

to Cedarview Opportunities Master Fund LP, in the principal amount of $3,000,000, in relation to a Loan and Security Agreement by and

between the Company, its subsidiaries, and the lender.

The Company will use the proceeds of the Note for general working capital purposes

and to repay certain indebtedness.

The Company received the funds on February 6, 2024, minus a 3% origination fee.

To secure repayment

of the note, the Company issued the lender a security interest in the assets of the Company and its subsidiaries.

The Company also issued

an irrevocable letter to its transfer agent to reserve 3,000,000 shares of its common stock until the note is repaid.

If the Company

defaults on the repayment of the note then the transfer agent will transfer the shares to the Lender for the lender to sell until the

amounts due under the note are repaid in full and return any remaining shares.

The Company will repay the amounts due under the note

first three months are interest only payments, which the Company prepaid at closing, and then twelve equal monthly installment

payments of interest plus $250,000, which must be made on or before May 5, 2025 (the maturity date).

The Company’s obligation

to repay the funds is guaranteed by the Company’s subsidiaries, which are signatories to the Agreement and a corresponding Guaranty.

As additional consideration for the lender loaning us the principal amount, Jorgan Development, LLC (“Jorgan”), an entity

controlled by James Ballengee, our Chief Executive Officer, and James H.

Ballengee as an individual executed a Subordination Agreement

under which Jorgan and Mr.

Ballengee agreed to subordinate the security interest they have in our assets securing obligations due

to them to the security interest granted to the lender under the agreement.

The Company paid a finder $70,000 in relation to obtaining

the loan and issued the lender 300,000 shares of its common stock at $0.951 per share, restricted in accordance with Rule 144, as

additional consideration for the loan, which was recorded as a discount against the face amount of the note.

(d) The Company is no longer seeking forgiveness of these loans and will repay these loans in cash.

Share-Based Compensation & Warrants

Stock Options & Awards

Generally accepted accounting principles require share-based payments to employees, including grants of employee stock options, warrants, and common stock to be recognized in the income statement based on their fair values at the date of grant, net of estimated forfeitures.

The Company has granted stock-based compensation to employees, including the issuance of 1,872,918 employee stock options granted in June 2022 that were to vest over a period of two years, for which 451,158 of these options were cancelled with the resignation without cause in October 2022 of our prior Chief Executive Officer.

For the nine months ended September 30, 2023 and 2022, employee stock-based compensation was $ 1,260,476 and $ 1,340,703 .

On October 24, 2022, the Compensation Committee resolved to increase their compensation including the issuance of 100,000 stock options per independent board member, exercisable at $2.50 per share, vesting immediately.

Non-statutory or independent Board of Director stock-based compensation was none and $ 855,000 for the nine months ended September 30, 2023 and 2022.

In 2022, the Company closed on its underwritten public offering in which the Company granted the underwriter, EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”), a 45-day option to purchase up to an additional 240,000 shares of Common Stock at the public offering price per share, less the underwriting discounts and commissions, to cover over-allotments, if any.

These options were not exercised and expired.

On June 20, 2023, we issued a 15 % secured promissory note due to Al Dali International for Gen.

Trading & Cont.

Co., a company organized under the laws of Kuwait (“DIC”).

As security to secure repayment of the Note, we issued DIC an option to purchase 1,000,000 shares of our common stock at an exercise price of $1.179 per share, which was recorded as a debt discount in the amount of $ 467,509 , which is amortized to interest expense over the term of the agreement using the effective interest method.

There were no other options granted during the nine months ended September 30, 2023 and 2022, respectively.

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the options on the date of issuance are as follows:

Schedule of assumptions

December 31, 2021

September 30,

Risk-free interest rate

0.24 - 5.23 %

Expected dividend yield

Expected life

2.1 - 10 years

Expected volatility rate

The following table summarizes all stock option activity of the Company for the nine months ended September 30, 2023 and 2022:

The Company has granted stock-based compensation to employees, including stock awards in conjunction with the CEO’s October 2022 employment agreement.

We issued additional stock awards of 245,536 that vest between quarterly for 12 months to cliff vesting in 12 and 18 months in conjunction with another employee’s contract, which we entered into in July 2023.

For the three months ended March 31, 2024, stock-based compensation was $ 327,985 .

In January 2023, a new Board of Directors was nominated and approved.

Two new independent Board members were each issued stock non-statutory stock awards, which renewed in January 2024 in the amount of 48,082 .

Non-statutory stock-based compensation was $ 23,076 for the three months ended March 31, 2024.

There were no other options or awards granted

during the three months ended March 31, 2024.

The following table summarizes all stock option activity of the Company for the

three months ended March 31, 2024 and 2023:

Schedule of option activity

Outstanding, December 31, 2023

Outstanding, September 30, 2023

Outstanding, March 31, 2024

Outstanding, December 31, 2022

Outstanding, September 30, 2022

Outstanding, March 31, 2023

Exercisable, December 31, 2023

Exercisable, September 30, 2023

Exercisable, March 31, 2024

Exercisable, December 31, 2022

Exercisable, September 30, 2022

As of September 30, 2023 and 2022, the aggregate intrinsic value of the Company’s outstanding options was approximately none.

The aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

As of September 30, 2023 and 2022, the Company had 80,000 warrants outstanding.

On February 14, 2022, the Company closed on its underwritten public offering of 1,600,000 shares of common stock, at a public offering price of $5.00 per share.

In addition, the Company has issued the underwriter, EF Hutton, a 5-year warrant to purchase 80,000 shares of common stock at an exercise price equal $ 5.75 and were valued with a fair market value of $ 374,000 .

The impact of these warrants has no effect on stockholder’s equity, as they are considered equity-like instruments, and are considered a direct expense of the offering.

Exercisable, March 31, 2023

As of March 31, 2024 and 2023, the aggregate intrinsic value of the

Company’s outstanding options was approximately none.

The aggregate intrinsic value will change based on the fair market value

of the Company’s common stock.

The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes.

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The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision.

The Company recorded a provision for income taxes of $ 800 for the nine months ended September 30, 2023 and 2022, respectively.

The Company is projecting a 0.01 % effective tax rate for the year ending December 31, 2023, which is primarily the result of projected provision from book loss incurred for the year offset by additional valuation allowance on the net operating losses.

The Company’s effective tax rate for 2022 was 18.69 % which was, which was primarily the result of a change in the Company's valuation allowance on deferred tax assets.

As of December 31, 2022, the Company had estimated federal and state net operating loss (NOL) carryforwards of approximately $ 23.7 million.

Federal NOL carryforwards begin to expire in 2028.

The Company recorded a provision for income taxes of $ 800 for the three months ended March 31, 2024 and 2023, respectively.

The Company is projecting a ( - 0.83 % ) effective tax rate for the year ending December 31, 2024, which is primarily the result of permanent book to tax differences, increase in the valuation allowance, and the change in the naked credit deferred tax liability.

The Company’s effective tax rate for the year ending December 31, 2023 was ( - 0.87 % ), which was primarily the result of prior year true-ups and permanent adjustments.

Related Party Transactions

As of September 30, 2023, VWFI has paid $ 2,266,964 to Dzign Pro Enterprises, LLC (Dzign Pro) for engineering services related to our RPCs, site planning, and infrastructure, which Dzign Pro shares a common executive with VWFI.

As of September 30, 2023, VWFI also entered into a master revolving note payable to Dzign Pro in the amount of $ 300,000 , which accrues 5% interest per annum, has a maturity date of July 14, 2024, where no payments are made prior to the maturity date unless at the option of the fund.

VWFI also entered into a master revolving note payable to Van Tran Family LP, which is an affiliate of WealthSpace, LLC, the VWFI Fund Manager, in the amount of $1,351,845, which accrues 6% interest per annum, has a maturity that has been amended to October 11, 2024, where no payments are made prior to the maturity date unless at the option of the fund.

For the nine months ended September 30, 2023, we made cash payments of $ 50,000 on the Van Tran Family LP revolving note.

As of September, 2023 we are subleasing office space to Spectra Global Cuisine, LLC (Spectra), which shares officers with WealthSpace, LLC (the Fund Manager of VWFI).

For the nine months ended September 30, 2023 we realized $ 62,000 in office sublease lease revenue from Spectra.

As of September 30, 2023, the Company is carrying accounts receivable of $ 62,000 related to this sublease.

On May 25, 2023, we entered into a Consulting Agreement with Matthew Nicosia, a shareholder, affiliate via beneficial ownership, and our former Chief Executive Officer.

Under the terms of the agreement, Mr.

Nicosia is assisting our current Chief Executive Officer regarding transitioning certain projects Mr.

Nicosia was working on to our new Chief Executive Officer, primarily those operations related to our business in Kuwait and our attempt to sell some operations that we have impaired.

The agreement is for an initial term of three-months and we have paid Mr.

Nicosia a total of $ 25,000 in cash and accrued $ 30,000 , to be paid in common stock.

We also advanced Mr.

In 2023 we subleased office space to Spectra Global Cuisine, LLC (Spectra), which shares officers with WealthSpace, LLC (the Fund Manager of VWFI).

For the three months ended March 31, 2024, we realized $ 54,000 in office sublease lease revenue from Spectra.

As of March 31, 2024, the Company is carrying accounts receivable of $ 76,000 related to this sublease.

In 2023, in connection with our Consulting Agreement with Matthew Nicosia, we advanced Mr.

Nicosia $ 21,000 for a business expenses related to a trip to Kuwait for the Company and have requested evidence of his business expenses.

We have received evidence of business expenses of approximately $ 16,254 to date and are awaiting documents and evidence for the remaining expense amount.

In May 2023, we entered into a Consulting Agreement with Trent Staggs, who is a current shareholder of the Company and one of our former directors.

The agreement was for a term of four months and has been terminated as of September 30, 2023.

For the nine months ended September 30, 2023, we paid Mr.

Staggs a total of $ 48,000 in cash under the terms of the agreement.

On June 15, 2022, we entered into a Membership Interest Purchase Agreement (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC, (“JBAH” and, together with Jorgan, the “Sellers”), as the equity holders of Silver Fuels Delhi, LLC (“SFD”) and White Claw Colorado City, LLC (“WCCC”) whereby, at closing, which occurred on August 1, 2022, we acquired all of the issued and outstanding membership interests in each of SFD and WCCC (the “Membership Interests”), making SFD and WCCC our wholly-owned subsidiaries.

The purchase price for the Membership Interests was approximately $32.9 million paid for by us with a combination of shares of our common stock, amount equal to 19.99% of the number of issued and outstanding shares of our common stock immediately prior to issuance, and secured three-year promissory notes issued by us in favor of the Sellers (the “Notes”).

As of September 30, 2023 we have accrued interest of approximately $ 232,745 and for the nine months ended September 30, 2023, we made cash payments of $ 2,807,032 on the Notes.

On June 15, 2022, we entered into a Membership Interest Purchase Agreement (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC, (“JBAH” and, together with Jorgan, the “Sellers”), as the equity holders of Silver Fuels Delhi, LLC (“SFD”) and White Claw Colorado City, LLC (“WCCC”) whereby, at closing, which occurred on August 1, 2022, we acquired all of the issued and outstanding membership interests where the consideration included secured three-year promissory notes issued by us in favor of the Sellers (the “Notes”).

At the time of the closing of these transactions Jorgan, JBAH, and our newly hired CEO, James Ballengee were not considered related parties.

As James Ballengee is now our Chief Executive Officer and is the beneficiary of Jorgan and JBAH, and the Sellers are significant shareholders, certain transactions, as noted below, related to Jorgan, JBAH, and James Ballengee are now considered related party transactions.

As of March 31, 2024 and 2023, we have accrued interest of approximately of none and $ 190,609 .

For the three months ended March 31, 2024 and 2023, we made cash payments of $ 2,493 and $ 1,161,540 .

In the business combination of acquiring WCCC we also acquired WCCC’s Oil Storage Agreement with White Claw Crude, LLC (“WC Crude”), who shares a beneficiary, James Ballengee, with Jorgan and JBAH.

2 unchanged sentences

The agreement expires on December 31, 2031.

For the nine months ended September 30, 2023 we have received tank storage revenue related to this contract of approximately $ 1,351,237 .

For the three months ended March 31, 2024 and 2023, we realized tank storage revenue of approximately $ 450,000 .

In the business combination of acquiring SFD, we acquired an amended Crude Petroleum Supply Agreement with WC Crude (the “Supply Agreement”), under which WC Crude supplies volumes of Crude Petroleum to SFD, which provides for the delivery to SFD a minimum of 1,000 sourced barrels per day, and includes a guarantee that when SFD resells these barrels, if SFD does not make at least a $5.00 per barrel margin on the oil purchased from WC Crude, then WC Crude will pay to SFD the difference between the sales price and $5.00 per barrel.

1 unchanged sentence

The Supply Agreement expires on December 31, 2031.

For the nine months ended September 30, 2023, we have made crude oil purchases from WC Crude of $ 26,373,647 and received deficiency payments of $ 364,309 .

In addition, SFD renewed a sales agreement in April 2023 with WC Crude to sell a natural gas liquid product to WC Crude.

For the three months ended March 2023, SFD sold the NGL stream at cost to WC Crude.

On April 1, 2023 sold the NGL stream at a profit to WC Crude.

We produced and sold natural gas liquids and crude oil to WC Crude in the amount of $ 9,599,740 for the nine months ended September 30, 2023.

In the business combination of acquiring SFD and WCCC we also entered into a Shared Services Agreement with Endeavor Crude, LLC (“Endeavor”), who shares a beneficiary, James Ballengee (the Company’s CEO), with Jorgan and JBAH.

For the three months ended March 31, 2024 and 2023, we have made crude oil purchases from WC Crude of $ 11,620,447 and $ 11,123,530 .

In addition, SFD entered into a sales agreement on April 1, 2022 with WC Crude to sell a natural gas liquid product to WC Crude.

We produced and sold natural gas liquids to WC Crude in the amount of $ 2,657,906 and 3,580,601 for the three months ended March 31, 2024 and 2023.

Under this agreement, we have the right, but not the obligation to use Endeavor for consulting services.

For the nine months ended September 30, 2023, Endeavor rendered services in the amount of $ 254,946 .

In September 2020, we entered into a consulting contract with LBL Professional Consulting, Inc.

(“LBL”), of which our Chief Financial Officer is also an officer.

For the nine months ended September 30, 2023, the Company was carrying, until recently paid, accounts payable of $ 20,413 owed to LBL for outstanding invoices from 2022.

For the three months ended March 31, 2024 and 2023, Endeavor rendered services in the amount of $ 36,252 and $ 74,644 .

We have an existing note payable issued to Triple T, which is owned by Dr.

Khalid Bin Jabor Al Thani, the 51% majority-owner of Vivakor Middle East LLC.

The note is interest free, has no fixed maturity date and will be repaid from revenues generated by Vivakor Middle East LLC.

As of September 30, 2023 the balance owed was $ 365,857 .

In March 2023 the parties agreed to extend the maturity date of the loan to March 10, 2024.

Khalid Bin Jabor Al Thani, the 51% majority-owner of Vivakor Middle East LLC The note is interest free, has no fixed maturity date and will be repaid from revenues generated by Vivakor Middle East LLC.

As of March 31, 2024 and 2023, the balance owed was $ 380,510 and $ 351,626 .

Subsequent Events

On November 10, 2023, we held a special meeting of our stockholders for the purpose of approving certain business items, namely:

To approve, pursuant to Nasdaq Listing Rule 5635(d), the issuance of a number of shares of the Company’s common stock pursuant to Membership Interest Purchase Agreement (the “Acquisition Agreement”) entered into on June 15, 2022, by and among the Company and 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”), including the issuance of such shares upon the conversion of promissory notes issued pursuant to the Acquisition Agreement, as amended on October 28, 2022, which could, under certain circumstances that may occur in the future, exceeding 19.99% of the number of shares of the Company’s common stock outstanding as of the date of the Acquisition Agreements (the “Acquisition Stock Issuance”);

To approve, pursuant to Nasdaq Listing Rule 5635(c) and 5635(d), the annual compensation of $ 1,000,000 payable in shares of the Company’s common stock to James Ballengee (the “CEO Compensation Shares”) pursuant to an executive employment agreement (the “Employment Agreement”) entered into on October 28, 2022, by and among the Company and James Ballengee with respect to the Company’s appointment of Mr.

Ballengee as Chief Executive Officer and Chairman of the board of directors of the Company;

the CEO Compensation Shares will be 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 Issuance”), 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;

To approve the Vivakor, Inc.

2023 Equity and Incentive Plan (the “Plan”), which provides equity-based incentive awards, in a total of 40,000,000 authorized shares of the Company’s common stock, to the Company’s and its subsidiaries’ employees, directors and consultants, thereby continuing to align the interests of such individuals with those of the stockholders;

To approve an amendment to the Articles of Incorporation of the Company

(the “Amendment to Articles”) with respect to the forum selection provisions, to amend the Articles of

Incorporation to provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of

the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the

Securities Act.;

To approve the increase of the number of common shares the Company is authorized to issue to 200 million in the proposed Amendment to Articles.

Each of these agenda items were approved by the holders of a majority of our common stock.

Additional information regarding the agenda items can be found in our Schedule 14A Proxy Statement filed with the Commission on September 26, 2023.

The exact result of our shareholder vote on the agenda items can be found in our Current Report on Form 8-K filed with the Commission on November 16, 2023.

All of the agenda items were approved by the shareholders on November 10, 2023.

As a result of these approvals, on November 10, 2023, the Company issued 7,042,254 restricted shares of the Company’s Common Stock in exchange for the forgiveness and cancellation of $ 10,000,000 of principal under the Notes on a pro rata basis, reflecting a conversion price of $ 1.42 per share, as well as 923,672 restricted shares of the Company’s Common Stock pursuant to the Ballengee employment agreement, whereas James Ballengee now beneficially owns approximately 41.86% of our outstanding Common Stock.

As a result, Mr.

Ballengee is able to significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions.

Ballengee’s change in ownership, certain change of control provisions in the Company’s agreements were triggered, including within the Chief Financial Officer’s employment agreement, which pays the executive a bonus, which is calculated at the executive’s base salary multiplied by two.

The Company has evaluated subsequent events through the date the financial statements were available to issue.

On April 4, 2024, we issued 1,189,745

shares of common stock at approximately $ 0.79

per share for a $ 483,292

reduction of liabilities and $ 706,453

in stock based compensation for executives, members of the Board of Directors and certain third party service providers.

These shares were issued under our S-8 Registration

Statement filed with the Securities and Exchange Commission (the “SEC”) on February 9, 2024.

On May 14, 2024, we issued a promissory note (the

“Note”) due as described below, to our Chief Executive Officer and Chairman of the Board, in the principal amount of up to

$ 1,500,000 , for which loan advances will be made to the Company as requested.

The Company will use the proceeds of the Note for general

working capital purposes and to repay certain indebtedness.

The intent of the Note is to be short term in nature and be repaid in 30 days.

Any amounts that are not repaid in 30 days will bear interest thereafter at a rate of 11% per annum.

As of the date of this filing, approximately

$ 100,000 has been advanced to the Company under this Note.

Each advance matures after six months from the date the Company receives

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

What changed 10-Q

Item 1. Financial Statements