What changed in this filing

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Item 1. Financial Statements

2024-08-16 compared with 2024-05-20 · 295 added, 275 removed, 261 unchanged (69% of the section changed)

4 unchanged sentences

Cash and cash equivalents

Accounts receivable

Accounts receivable, net

Accounts receivable- related party

30 unchanged sentences

200,000,000 shares authorized;

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

29,135,547 and 26,220,508 were issued and outstanding as of June 30, 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

Six Months Ended

Product revenue - third parties

8 unchanged sentences

Loss from operations

( 1,616,922 )

( 1,124,872 )

Other income (expense):

Unrealized loss on marketable securities

on deconsolidation of subsidiary

Unrealized gain (loss) on marketable securities

Gain 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

6 unchanged sentences

Stockholders’

March 31, 2024 (unaudited)

Issuance of common stock for services

Issuance of common stock for a reduction of liabilities

Issuance of common stock on conversion of debt

Issuance of warrants for services

Stock based compensation

June 30, 2024 (unaudited)

Preferred Stock

Non-controlling

Stockholders’

December 31, 2023

$ ( 65,908,406 )

Issuance of common stock for

a reduction of liabilities

Issuance of common stock for services

Issuance of common stock for a reduction of liabilities

Issuance of common stock on conversion of debt

Issuance of warrants for services

Stock based compensation

( 1,882,235 )

( 1,910,543 )

June 30, 2024 (unaudited)

Preferred Stock

Non-controlling

Stockholders’

March 31, 2023 (unaudited)

$ ( 67,790,641 )

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

Non-qualified stock options issued to third party

June 30, 2023 (unaudited)

Preferred Stock

2 unchanged sentences

December 31, 2022

$ ( 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 )

Distributions to noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

Non-qualified stock options issued to third party

June 30, 2023 (unaudited)

See accompanying notes to consolidated financial statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

OPERATING ACTIVITIES:

Consolidated net loss

$ ( 1,910,543 )

$ ( 2,817,167 )

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

4 unchanged sentences

Gain on deconsolidation of variable interest entity

Deferred income taxes

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:

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

Payment of notes payable

Payment of notes payable- related party

4 unchanged sentences

CASH AND CASH EQUIVALENTS, END OF PERIOD

SUPPLEMENTAL CASHFLOW INFORMATION:

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the year for:

3 unchanged sentences

Capitalized interest on construction in process

Equity issued with debt

Note receivable received in exchange for sale of subsidiary

Common stock issued with debt

Non-qualified stock options issued with debt

Common stock issued for services

Stock Warrants issued for services

Common stock issued on conversion of debt

See accompanying notes to consolidated financial statements

3 unchanged sentences

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, 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.

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 and six months ended June 30, 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.

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.

In 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 of a public company after the buyer closes a transaction to become a public company, which has a ceiling of 17.99% of the total number of shares outstanding of the public company.

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 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 six months ended June 30, 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.

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.

For the six months ended June 30, 2024, the Company continued to build its wash plant for planned 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 six months ended June 30, 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 three months ended March 31, 2024.

We performed an analysis and assessed no triggering event has occurred, and no impairment for the six months ended June 30, 2024.

Revenue Recognition

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:

For the six months ended June 30, 2024, our sales consisted of storage services and the sale of crude oil or like products.

For the six months ended June 30, 2024, disaggregated revenue by customer type was as follows:

$ 26,223,680 in crude oil sales and $ 5,078,482 in product related to natural gas liquids sales.

4 unchanged sentences

Major Customers and Concentration of Credit Risk

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.

The Company has two major customers, which account for approximately 100 % of the balance of accounts receivable as of June 30, 2024 and 2023.

Our two major customers (one of which is a related party) accounted for 100 % of the Company’s revenues for the six months ended June 30, 2024 and 2023.

Advertising Expense

Advertising costs are expensed as incurred.

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

The Company did no t incur advertising expense for the six months ended June 30, 2024 and 2023.

Net Income/Loss Per Share

2 unchanged sentences

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.

For the three months June 30, 2024 and 2023 our potential dilutive instruments were excluded from the weighted-average calculation as they were antidilutive.

Potential dilutive instruments as of June 30, 2024 and 2023 include the following:

convertible notes payable, which are convertible into approximately 234,560 and 14,560 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 2,617,320 and 1,421,760 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 572,948 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.

The Company also has warrants outstanding to purchase 399,040 shares of common stock as of June 30, 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, 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.

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.

17 unchanged sentences

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.

We have historically suffered net losses and cumulative negative cash flows from operations, and as of June 30, 2024, we had an accumulated deficit of approximately ( 71,103,639 ) $71.1 million.

As of June 30, 2024 and 2023, we had a working capital deficit of approximately $ 38 million and $ 34.9 million, respectively.

As of June 30, 2024, we had cash of approximately $ 95 thousand.

As of June 30, 2024, we have current obligations to pay approximately $20.7 million of debt.

Of the $20.7 million, $14.5 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 six months ended June 30, 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).

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 six months ended June 30, 2024, we raised an additional $3.6 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.

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 June 30, 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.

3 unchanged sentences

Accounts receivable

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.

As of June 30, 2024 and December 31, 2023, an allowance for doubtful accounts of none was deemed necessary.

As of June 30, 2024 and December 31, 2023, trade accounts receivable of none 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 $ 106,000 to the Company as of June 30, 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.

As of June 30, 2024 and December 31, 2023, the Company had other assets of $ 1,511,254 and $ 1,118,188 , which consist of various security deposits on office and warehouse leases, a deposit for a reclamation bond, and finance lease deposits.

As of June 30, 2024 and December 31, 2023, the Company prepaid expenses of $ 180,385 and $ 74,876 mainly consists of prepaid insurances.

As of June 30, 2024 and December 31, 2023, inventories of $ 75,167 and $ 44,632 consist of crude oil.

The crude oil is related to the Company’s oil gathering facility in Delhi, Louisiana.

Property and Equipment

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

The following table sets forth the components of the Company’s property and equipment at June 30, 2024 and December 31, 2023:

Schedule of property and equipment, net

March 31, 2024

June 30, 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 .

Gross Carrying

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

WCCC Tank Expansion

Total fixed assets

For the six months ending June 30, 2024 and 2023, depreciation expense was $ 73,694 and $ 74,302 .

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

1 unchanged sentence

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:

The following table sets forth the components of the Company’s intangible assets at June 30, 2024 and December 31, 2023:

Schedule of components of intellectual property

March 31, 2024

June 30, 2024

December 31, 2023

Gross Carrying

Extraction Technology patents

7 unchanged sentences

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.

June 30, 2024

The measurement of assets acquired and liabilities assumed in the business combination is based on preliminary estimates made by management and subject to adjustment within twelve months.

Management 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

2 unchanged sentences

Accounts payable

Office access deposits

Unearned revenue

3 unchanged sentences

Accounts payable and accrued expenses

of accounts payable and accrued expenses related parties

Schedule of accounts payable and accrued expenses related parties

Accounts payable- related parties

Accrued interest (notes payable)- related parties

Accounts payable and accrued expenses- related parties

Accrued compensation

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.

For the six months ended June 30, 2024, our accounts payable and accrued expenses include recently received unverified billings from a service provider in the amount of $ 371,075 , of which the Company is in the process of reviewing and may dispute in the near future.

As of June 30, 2024 and December 31, 2023, our accounts payable are primarily made up of trade payables for the purchase of crude oil.

Trade accounts payables in the amount of $ 2,810,785 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.

As of June 30, 2024 and December 31, 2023, accounts payable related to services rendered of $ 426,544 and $ 178,325 , which are not trade payables, are with a vendor who our CEO is a beneficiary of.

As of June 30, 2024, accrued compensation to current employees includes $ 128,697 in accrued vacation pay due to our Chief Executive Officer, which may be payable in cash or stock if unused, and $ 207,124 due to our Chief Financial Officer, with $ 90,002 in accrued sick and vacation pay is payable in cash if unused.

Accrued compensation includes prorated year end accrued cash bonuses that are considered probable.

On June 13, 2024, we entered into a new executive employment agreement with our Chief Financial Officer, and in connection with the executive employment agreement we also entered into a settlement agreement with respect to accrued compensation owed by the Company to our Chief Financial Officer (the “Settlement Agreement”).

Pursuant to the new employment agreement, our Chief Financial Officer will receive:

(i) $450,000 annually (the “Base Salary”);

(ii) an annual cash incentive bonus of a minimum of 50% of the Base Salary (a portion of which may be payable in the form of restricted common stock of the Company) and a maximum of 120% of the Base Salary;

and (iii) an annual equity incentive bonus of a minimum of 25% of the Base Salary and a maximum of 120% of the Base Salary in shares of restricted stock.

He will also be eligible for a cash transaction bonus (the “Transaction Bonus”) for Qualified Transactions, as defined in the new employment agreement, of 0.5% of the enterprise value of the assets, equity or business sold or acquired or the listing value of the equity or debt being listed on a national exchange.

For each of the closing of the Merger Agreement and Endeavor MIPA (as defined herein), he will receive a bonus of $200,000, with $100,000 for each such bonus to be paid in cash and the remaining $100,000 for each such bonus to be paid in shares of the Company’s common stock, valued on the date of close of the Merger Agreement and the Endeavor MIPA, respectively.

The foregoing bonuses are in lieu of a Transaction Bonus for either the Merger Agreement or the Endeavor MIPA.

The new employment agreement is for an initial term of two years and will auto-renew for subsequent one-year terms if not terminated by either party at the end of a term, which requires 90 days prior notice.

The new employment agreement may also be terminated under standard cause and without cause termination and resignation provisions.

At the time of the termination of the previous executive employment agreement, the Company owed its CFO $ 1,167,750 in accrued salary and bonuses, plus interest (together, the “Accrued Compensation”), for serving as the Company’s Chief Financial.

Pursuant to the Settlement Agreement, the Company and our CFO agreed the Accrued Compensation would be paid to our CFO under the terms of a straight promissory note in the principal amount of the Accrued Compensation (the “Note”) (see Note 9).

On June 26, 2024, we entered into an executive employment agreement with Patrick M.

Knapp to join the Company as its Executive Vice President, General Counsel, & Secretary (the “Knapp Agreement”).

The Knapp Agreement provides for an annual base salary of $ 350,000 .

In addition, the Knapp Agreement provides for annual incentive cash and equity compensation of up to $ 840,000 based on certain performance goals as further set forth therein.

As an inducement to enter into the Knapp Agreement, Mr.

Knapp received a one-time signing grant of Company common stock equivalent in value to $ 250,000 , which are priced per share based on the volume-weighted average price for the preceding five (5) trading days prior to the day of such grant (calculated to be 140,190 shares based on the effective date of the Knapp Agreement), subject to an eighteen (18)-month lockup period and a conditional clawback obligation concurrent therewith, which shares were issued to him on July 2, 2024.

Loans and Notes Payable

3 unchanged sentences

Various promissory notes and convertible notes

Novus Capital Group LLC Note (a)

Novus Capital Group LLC Note

National Buick GMC

Blue Ridge Bank (d)

Blue Ridge Bank

Small Business Administration

1 unchanged sentence

Trading & Cont.

Cedarview Opportunities Master Fund LP (c)

Keke Mingo (a)

Cedarview Opportunities Master Fund LP

Total notes payable

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Schedule of loans and notes payable related parties

Various variable interest promissory notes- related parties

Jorgan Development, LLC (b)

Triple T Notes

Jorgan Development, LLC

Ballengee Holdings, LLC (b)

Tyler Nelson (c)

Triple T Trading Company LLC

Total notes payable- related parties

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Schedule of maturities of loans and notes payable

(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.

On April 8, 2024, we executed an amended and restated convertible promissory note for the original promissory note (the “Amended Note”).

The convertible promissory note replaces an original promissory note between the Company and the holder dated December 5, 2023 (the “Original Note”), but maintains the same interest rate and maturity date of the Original Note, and the obligation to issue 100,000 shares of the Company’s restricted stock remains in effect.

Pursuant to the terms of the Amended Note the holder can convert the outstanding principal and interest due under the Amended Note into shares of our common stock at price equal to 90% of the average closing price of the Company’s common stock for the previous three (3) trading days prior to the conversion date, with a floor conversion price of $0.75 per share.

The holder may not convert amounts owed under the Amended Note if such conversion would cause him to own more than 4.99% of our common stock after giving effect to the issuance, which limitation may be raised to 9.99% upon no less than 61 days notice to us regarding his desire to increase the conversion limitation percentage.

In May 2024, the lender converted all outstanding amounts ($1,048,493) into 903,095 shares of common stock at approximately $1.161 per share.

As previously disclosed, on May 14, 2024, we issued a promissory note (the “Note”), to James Ballengee, 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

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

On May 23, 2024, we issued a

promissory note to Ballengee Holdings, LLC, of which our Chief Executive Officer is the beneficial owner, which replaced and

rescinded the above referenced note with James Ballengee effective back to May 14, 2024, under the same terms such that all

obligations under the notes are the responsibility of Ballengee Holdings, LLC and the prior note with James Ballengee is no longer

On June 13, 2024, the Company owed our Chief Financial Officer $1,167,750 in accrued salary and bonuses, plus interest (together, the “Accrued Compensation”), for serving as the Company’s Chief Financial, and executed a Settlement Agreement, where the Company and the CFO agreed the Accrued Compensation would be paid under of a straight promissory note in the principal amount of the Accrued Compensation (the “Note”).

Under the terms of the Note, the amounts due will accrue interest at 8% per annum and will be paid by paying 5% of any money received by the Company from closed future financings or acquisition/merger/sale transactions until the Note has been paid in full.

In the event the Note has not been paid in full by December 31, 2024, the Note will mature and any amounts due thereunder will be due and payable in full on such date.

Commitments and Contingencies

Finance Leases

On June 18, 2024, our subsidiary White Claw

Colorado City, LLC (“WCCC”), entered into a supplement (“Supplement No.

3”) to an existing Master Agreement

(the “Master Agreement”) with Maxus Capital Group, LLC (“Maxus”).

Under Supplement No.

3, Maxus agreed to

finance approximately $1 million for the build-out of certain equipment and facilities related to the wash plant we are in the

process of constructing on land leased by our subsidiary, VivaVentures Remediation Corp., in Houston, Texas.

Once the relevant

equipment is constructed Maxus will own the equipment and we will lease these additions to our wash plant facility from Maxus under

the terms of Supplement No.

Under the terms of the lease, we expect our lease payments to Maxus to be approximately $ 58,595

per month over four years, with an early buyout option or option at the end of the base term to purchase the wash plant equipment

for approximately $ 683,000

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 2024.

As previously disclosed, on May 23, 2023 we entered into a supplement (“Supplement No.

2”) to the Master Agreement Maxus, under which Maxus funded approximately $2.2 million to finance the build-out of other Houston wash plant equipment additions, which such lease was anticipated to commence in the second quarter of 2024.

As of June 30, 2024, we anticipate that this lease will now commence in the fourth quarter of 2024.

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

Because we were involved in the construction of the wash plant and were responsible for paying a portion of the construction costs, we evaluated the control criteria in ‘build to suit’ lease accounting guidance under GAAP ASC 842 (Leases) where the Company was deemed, for accounting purposes, to have control of the wash plant during the construction period.

Accordingly, the Company recorded project construction costs incurred during the construction period for the wash plant incurred by the landlord as a construction-in-process asset and a related financing obligation on our consolidated balance sheets.

The total $ 4.8 million of project construction costs (which includes a total of $2.2 million of costs funded by Maxus, and another $1 million that is to be funded) have been capitalized and recorded to construction-in-process within ‘Property and equipment, net’.

The total $ 3.2 million of construction costs funded by Maxus have been recorded as a component of ‘Accounts payable and accrued expenses’.

Employment Agreements

Pursuant to the new employment agreement, our Chief Financial Officer will receive:

(i) $450,000 annually (the “Base Salary”);

and (iii) an annual equity incentive bonus of a minimum of 25% of the Base Salary and a maximum of 120% of the Base Salary in shares of restricted stock.

The foregoing bonuses are in lieu of a Transaction Bonus for either the Merger Agreement or the Endeavor MIPA.

The new employment agreement may also be terminated under standard cause and without cause termination and resignation provisions.

On June 26, 2024, we entered into an executive employment agreement with Patrick M.

Knapp to join the Company as its Executive Vice President, General Counsel, & Secretary (the “Knapp Agreement”).

The Knapp Agreement provides for an annual base salary of $ 350,000 .

In addition, the Knapp Agreement provides for annual incentive cash and equity compensation of up to $ 840,000 based on certain performance goals as further set forth therein.

As an inducement to enter into the Knapp Agreement, Mr.

Share-Based Compensation & Warrants

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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 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:

The Company has granted stock-based compensation to employees, including stock options and stock awards in conjunction with our Board of Director and executive employment agreements, including stock awards and bonuses that are prorated or vest.

In 2024, we issued additional stock awards for 371,954 common shares that vested immediately or that will vest quarterly in conjunction with annual compensation for current and a new Board of Direct compensation, and two executed executive employment contracts (see Note 9).

In 2023, our CEO’s executive employment agreement renewed including stock awards of 1,657,016 common shares that vest quarterly, and the continued vesting of two stock incentive awards issued to our Executive Vice President, Operations quarterly of 245,536 common shares, one of which vests quarterly and second cliff vests at 12 and 18 months.

For the six months ended June 30, 2024, stock-based compensation was $ 1,136,923 .

Non-statutory stock-based compensation was $ 92,522 for the six months ended June 30, 2024.

There were no other options or awards granted during the six months ended June 30, 2024.

The following table summarizes all stock option activity of the Company for the six months ended June 30, 2024 and 2023:

Schedule of option activity

Outstanding, December 31, 2023

Outstanding, March 31, 2024

Outstanding, June 30, 2024

Outstanding, December 31, 2022

Outstanding, March 31, 2023

Outstanding, June 30, 2023

Exercisable, December 31, 2023

Exercisable, March 31, 2024

Exercisable, June 30, 2024

Exercisable, December 31, 2022

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.

Exercisable, June 30, 2023

As of June 30, 2024 and 2023, the aggregate intrinsic value of the Company’s outstanding options was approximately $ 723,354 and 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 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.

The Company recorded a provision for income

taxes of $ 33,983

and $800 for the six months ended June 30, 2024 and 2023, respectively.

The Company is projecting a ( - 0.69 % )

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

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.

For the six months ended June 30, 2024, we realized $ 84,000 in office sublease lease revenue from Spectra.

As of June 30, 2024, the Company is carrying accounts receivable of $ 106,000 related to this sublease.

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”).

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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 .

As of June 30, 2024 and 2023, we have accrued interest of approximately of none and $ 452,283 owed on the Note.

For the six months ended June 30, 2024 and 2023, we made cash payments of $ 700,478 and $ 1,705,590 on the Note.

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.

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The agreement expires on December 31, 2031.

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

For the six months ended June 30, 2024 and 2023, we realized tank storage revenue of approximately $ 900,000 for each period.

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.

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The Supply Agreement expires on December 31, 2031.

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 .

For the six months ended June 30, 2024 and 2023, we made crude oil purchases from WC Crude of $ 23,143,488 and $ 15,931,252 , respectively.

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.

We produced and sold crude and natural gas liquids to WC Crude in the amount of $ 5,078,482 and $ 6,428,026 , respectively, for the six months ended June 30, 2024 and 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, with Jorgan and JBAH.

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

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

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

For the six months ended June 30, 2024 and 2023, Endeavor rendered services in the amount of $ 183,344 and $ 156,845 , respectively.

On May 14, 2024, we issued a promissory

note, to James Ballengee, 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 promissory note for

general working capital purposes and to repay certain indebtedness.

The intent of the promissory 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 %

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

On May 23, 2024, we issued a

promissory note to Ballengee Holdings, LLC, of which our Chief Executive Officer is the beneficial owner, which replaced and

rescinded the above referenced note with James Ballengee effective back to May 14, 2024, under the same terms such that all

obligations under the notes are the responsibility of Ballengee Holdings, LLC and the prior note with James Ballengee is no longer

As of June 30, 2024, the balance of this note was $ 635,150 .

On June 13, 2024, we owed our Chief Financial Officer $ 1,167,750 in accrued salary and bonuses, plus interest (together, the “Accrued Compensation”), for serving as the Company’s Chief Financial Officer, and executed a Settlement Agreement where the Accrued Compensation would be paid under the terms of a straight promissory note in the principal amount of the Accrued Compensation.

Under the terms of the note, the amounts due will accrue interest at 8% per annum and will be paid by paying 5% of any money received by the Company from closed future financings or acquisition/merger/sale transactions until the note has been paid in full.

In the event the note has not been paid in full by December 31, 2024, the note will mature and any amounts due thereunder will be due and payable in full on such date.

As of June 30, 2024 the balance of principal and accrued interest was $ 1,172,472 .

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

As of June 30, 2024 and 2023, the balance owed was $ 387,354 and $ 359,241 , respectively.

Subsequent Events

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

On July 2, 2024, the Company issued Mr.

Knapp 140,190 shares of its common stock at approximately $ 1.84 per share for the $ 250,000 signing bonus related to his executive employment agreement.

On July 5, 2024, the Company received a loan from Ballengee Holdings, LLC, an entity controlled by James Ballengee, the Company’s Chairman and Chief Executive Officer, in the principal amount of Five Hundred Thousand Dollars ($500,000) and, in connection therewith, the Company agreed to issue 21,552 restricted shares of the Company’s common stock as an equity incentive for the loan.

The note bears interest at the rate of 10 % per annum, was amended on July 19, 2024 to mature on September 30, 2025 .

The note allows the holder to convert the outstanding principal and interest due under the loan into shares of our common stock at price equal to 90 % of the average closing price of our common stock for the previous five (5) trading days prior to the conversion date, with a floor conversion price of $ 1.00 per share.

The lender may not convert amounts owed under the note if such conversion would cause him to own more than 4.99 % of our common stock after giving effect to the issuance, which limitation may be raised to 9.99 % upon no less than 61 days notice to us regarding his desire to increase the conversion limitation percentage.

On July 5, 2024, the Company entered into a

Consulting Agreement with 395 Group, LLC, a Nevada limited liability company (“395”), under which 395 agreed to provide

the Company with general advisory and business development services.

Specifically, 395 agreed to advise the Company for the next

four (4) months regarding capitalization, business development, business relationships, industry guidance, and assist with

understanding what is happening in the Company’s market space.

In exchange for 395’s services, the Company agreed to pay

total cash compensation of $ 340,000

and equity compensation of 50,000

shares of the Company’s restricted common stock, with one-half of the cash compensation and all the equity compensation due

upon signing of the agreement and the other half of the cash compensation due thirty (30) days after signing.

As of the date of this

report, the Company has paid $255,000 of the cash compensation.

On July 8, 2024, the Company received a loan from a non-affiliated individual lender in the principal amount of Three Hundred Fifty Thousand Dollars ($350,000) and, in connection therewith, the Company agreed to issue 15,982 restricted shares of the Company’s common stock as an equity incentive for the loan.

The note bears interest at the rate of 10 % per annum, and was amended on July 19, 2024 to mature on September 30, 2025.

The lender may not convert amounts owed under the loan if such conversion would cause him to own more than 4.99 % of our common stock after giving effect to the issuance, which limitation may be raised to 9.99 % upon no less than 61 days notice to us regarding his desire to increase the conversion limitation percentage.

One July 26, 2024, the Company entered into that certain Strata Purchase Agreement with ClearThink Capital Partners, LLC (the “ClearThink ELOC” and “ClearThink”, respectively), pursuant to which ClearThink agreed to purchase a number of shares of common stock in tranches as directed by the Company, up to $ 5,000,000 worth of common stock.

Each tranche request is limited to the lesser of $ 1,000,000 or 500% of the daily average shares traded value for the 10 days prior to the date of any Company request to purchase.

The minimum purchase notice allowable is $ 25,000 , and there must be a minimum of 10 trading days between purchase notices unless the parties mutually agree otherwise.

The Company cannot issue a purchase notice if it would cause ClearThink to own more than 9.99% of the Company’s outstanding common stock.

The Company also executed a registration rights agreement and stock purchase agreement with ClearThink under the terms of the ClearThink ELOC.

On July 31, 2024, the Company entered into a stock purchase agreement under which the Company agreed to sell an aggregate of 1,600,000 shares of restricted common stock to a non-affiliate in exchange for $ 800,000 .

In July 2024, Maxus Capital Group, LLC funded approximately $600,000 under the Supplement No.

3 to finance the build-out of certain equipment and facilities related to our wash plant in Houston, Texas.

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