What changed in this filing

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Item 1. Financial Statements

2024-11-19 compared with 2024-08-16 · 232 added, 219 removed, 337 unchanged (57% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

Cash and cash equivalents

Accounts receivable, net

Accounts receivable

Accounts receivable- related party

30 unchanged sentences

200,000,000 shares authorized;

29,135,547 and 26,220,508 were issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

33,638,273 and 26,220,508 were issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Product revenue - third parties

28 unchanged sentences

Stockholders’

March 31, 2024 (unaudited)

June 30, 2024 (unaudited)

Issuance of common stock for services

Issuance of common stock for a reduction of liabilities

Issuance of common stock for cash

Issuance of common stock on conversion of debt

Issuance of warrants for services

Stock based compensation

June 30, 2024 (unaudited)

September 30, 2024 (unaudited)

Preferred Stock

3 unchanged sentences

Issuance of common stock for services

Issuance of common stock for cash

Issuance of common stock for a reduction of liabilities

2 unchanged sentences

Stock based compensation

June 30, 2024 (unaudited)

September 30, 2024 (unaudited)

Preferred Stock

1 unchanged sentence

Stockholders’

March 31, 2023 (unaudited)

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

Non-qualified stock options issued to third party

June 30, 2023 (unaudited)

Stock based compensation

September 30, 2023 (unaudited)

Preferred Stock

2 unchanged sentences

December 31, 2022

Issuance of common stock for a reduction of liabilities

Distributions to noncontrolling interest

1 unchanged sentence

Non-qualified stock options issued to third party

June 30, 2023 (unaudited)

Stock based compensation

September 30, 2023 (unaudited)

See accompanying notes to consolidated financial statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

OPERATING ACTIVITIES:

4 unchanged sentences

Stock-based compensation

Unrealized loss- marketable securities

Unrealized (gain) loss- marketable securities

Gain on deconsolidation of variable interest entity

9 unchanged sentences

Interest on notes payable

Net cash used in operating activities

Net cash provided (used) in operating activities

INVESTING ACTIVITIES:

5 unchanged sentences

Proceeds from loans and notes payable- related party

Proceeds from sale of common stock

Payment of notes payable

5 unchanged sentences

CASH AND CASH EQUIVALENTS, END OF PERIOD

SUPPLEMENTAL CASH FLOW INFORMATION:

SUPPLEMENTAL CASHFLOW INFORMATION:

Cash paid during the year for:

6 unchanged sentences

Common stock issued for services

Stock Warrants issued for services

Common stock issued on conversion of debt

Common stock issued for a reduction in liabilities

See accompanying notes to consolidated financial statements

9 unchanged sentences

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

The operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024.

Vivakor, Inc.

(“Vivakor” or the “Company”) is a socially responsible operator, acquirer and developer of technologies and assets in the oil and gas industry, as well as related environmental solutions.

Currently, our efforts are primarily focused on operating crude oil gathering, storage and transportation facilities, as well as contaminated soil remediation services.

One of our facilities in Delhi, Louisiana sells crude under agreements with a large energy company.

A different facility owns crude oil storage tanks near Colorado City, Texas.

The storage tank is presently connected to the Lotus pipeline system and an extension to a major pipeline system is being constructed.

Our soil remediation services specialize in the remediation of soil and the extraction of hydrocarbons, such as oil, from properties contaminated by or laden with heavy crude oil and other hydrocarbon-based substances utilizing our Remediation Processing Centers (RPCs).

Our patented process allows us to successfully recover the hydrocarbons which we believe could then be used to produce asphaltic cement and/or other petroleum-based products.

We are currently focusing our soil remediation efforts on our project in Kuwait and our upcoming project in the Houston, Texas area.

Deconsolidation

On September 7, 2023 we entered into an Acquisition Agreement (the “Agreement”) to sell 100% of the common stock of VivaSphere, Inc.

6 unchanged sentences

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.

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, recognizing a gain of $ 177,550 for the six months ended September 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.

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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 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.

For the nine months ended September 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 nine months ended September 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.

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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 six months ended June 30, 2024.

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

Revenue Recognition

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:

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

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

$ 40,132,938 in crude oil sales, and $ 7,985,998 in product related to natural gas liquids sales.

During the third quarter of 2024, the Company entered into a Crude Petroleum Sales Agreement with White Claw Crude (“WC Crude”).

Both WC Crude Crude Petroleum Sales Agreement and the existing WC Crude Crude Petroleum Supply Agreement(s) are cash net settled at market prices.

Related Party Revenues

2 unchanged sentences

Our revenue from related parties for 2024 and 2023 was $ 17,119,485 and $ 9,834,095 .

During the third quarter of 2024, the Company entered into a Crude Petroleum Sales Agreement with WC Crude.

Both the WC Crude Crude Petroleum Sales Agreement and the existing WC Crude Crude Petroleum Supply Agreement(s) are cash net settled at market prices.

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 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.

The Company has two major customers, which account for approximately 99 % of the balance of accounts receivable as of September 30, 2024 and 2023.

Our two major customers (one of which is a related party) accounted for 99 % of the Company’s revenues for the nine months ended September 30, 2024 and 2023.

Advertising Expense

Advertising costs are expensed as incurred.

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

The Company did no t incur advertising expense for the nine months ended September 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 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:

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

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

convertible notes payable, which are convertible into approximately 773,269 and 214,560 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 2,003,252 and 2,590,968 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 572,948 and 680,274 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 warrants outstanding to purchase 399,040 shares of common stock as of June 30, 2024 and 2023.

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 6), which such stock option was exercised in September 2024 for a reduction in debt.

The Company also has warrants outstanding to purchase 399,040 shares of common stock as of September 30, 2024 and 2023.

Use of Estimates

21 unchanged sentences

Going Concern & Liquidity

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.

We have historically suffered net losses and cumulative negative cash flows from operations, and as of September 30, 2024, we had an accumulated deficit of approximately $72.8 72,791,791 million.

As of September 30, 2024 and 2023, we had a working capital deficit of approximately $ 42.5 million and $ 19 million, respectively.

As of September 30, 2024, we had cash of approximately $ 687 thousand.

As of September 30, 2024, we have current obligations to pay approximately $24.8 million of debt.

Of the $24.8 million, $13.8 million can be satisfied through the issuance of registered common stock under the terms of the debt.

Approximately $13 million ($9.1 million of unearned revenue $3.9 million in accounts payable (Note 5)) is related to the sale leaseback of our Remediation Processing Unit A & B, wash plant facilities, and our White Claw Colorado City site pipeline extension.

Once construction is completed of these sites, of the $13 million, approximately $7.1 million will be financed over eight years and $3.9 million (Note 7) will be financed over four years.

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.

During the nine months ended September 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 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 June 30, 2024 because they have not closed as of the date of our filing.

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.

During the nine months ended September 30, 2024, we raised an additional $4.7 million through debt financings and $1.4 million through the sale of common stock.

Based on the above, we believe there is substantial doubt about the Company’s ability to continue as a going concern.

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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 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 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 June 30, 2024 and December 31, 2023:

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

Schedule of property and equipment, net

June 30, 2024

September 30, 2024

December 31, 2023

Gross Carrying

Office furniture

9 unchanged sentences

Total fixed assets

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

For the nine months ending September 30, 2024 and 2023, depreciation expense was $ 114,765 and $ 111,452 .

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 June 30, 2024 and December 31, 2023:

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

Schedule of components of intellectual property

June 30, 2024

September 30, 2024

December 31, 2023

Gross Carrying

Extraction Technology patents

7 unchanged sentences

December 31, 2023

June 30, 2024

September 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.

4 unchanged sentences

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

6 unchanged sentences

Schedule of accounts payable and accrued expenses related parties

September 30,

Accounts payable- related parties

2 unchanged sentences

Accrued compensation

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 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.

For the nine months ended September 30, 2024, our accounts payable and accrued expenses include 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 September 30, 2024 and December 31, 2023, our accounts payable are primarily made up of trade payables for the purchase of crude oil and unearned revenue related to the construction of and intended sale leaseback of Remediation Processing Unit- System A & B.

As of September 30, 2024 and December 31, 2023, trade accounts payables in the amount of $ 109,129 and $ 1,933,817 is with a vendor who our CEO is a beneficiary of.

As of September 30, 2024 and December 31, 2023, accounts payable related to consulting services rendered of $ 596,341 and $ 178,325 , are with a vendor who our CEO is a beneficiary of.

As of September 30, 2024, accrued compensation to current employees includes $ 147,982 in accrued vacation pay due to our Chief Executive Officer, which may be payable in cash or stock if unused, and $ 315,627 due to our Chief Financial Officer, which includes $ 90,002 in accrued sick and vacation pay is payable in cash if unused and $ 168,443 in accrued bonuses.

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.

On August 22, 2024, we entered into a new executive employment agreement with our Vice President, Marketing.

Pursuant to the new employment agreement, our Vice President, Marketing will receive $200,000 annually (the “Base Salary”), which after the first annual anniversary the Base Salary may increase to $350,000 contingent upon the Company achieving net profitability of $500,000 of all commodity trades by the Vice President, Marketing.

In addition, the employment agreement provides for annual incentive cash and equity compensation of up to $440,000 based on certain performance goals as further set forth therein.

As an inducement to enter into the executive employment agreement, the Vice President, Marketing is entitled to receive a one-time signing grant of Company common stock equivalent in value to $150,000, which is priced per share based on the closing price on the day of such grant (calculated to be 71,090 shares based on the effective date of the executive employment agreement).

The signing bonus has not been issued and is due not later than thirty (30) calendar days after we file an amended Registration Statement on Form S-8 with the Securities and Exchange Commission registering shares under a Long-Term Incentive Plan (“LTIP”), and the shares will only vest as set forth in the LTIP.

Loans and Notes Payable

2 unchanged sentences

Schedule of loans and notes payable

September 30,

Various promissory notes and convertible notes

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Trading & Cont.

Keke Mingo (a)

Justin Ellis (b)

Cedarview Opportunities Master Fund LP

4 unchanged sentences

Schedule of loans and notes payable related parties

September 30,

Jorgan Development, LLC

Ballengee Holdings, LLC (b)

Tyler Nelson (c)

Ballengee Holdings, LLC (c)

Triple T Trading Company LLC

3 unchanged sentences

Schedule of maturities of loans and notes payable

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.

On September 9, 2024, Al Dali International for Gen.

Trading & Cont.

(DIC) submitted a Notice of Exercise directly to our transfer agent to exercise its non-qualified stock option to purchase 1,000,000 shares of our common stock at an exercise price of $1.179 per share, which was originally issued as security to secure repayment of the note payable.

We are currently analyzing the exercise of the stock option and related issuance of the shares to ensure they complied with the terms of our agreement with DIC.

If we determine the issuance is in line with our agreement with DIC, then the remaining portion of note payable is anticipated to be paid out of operations of the RPC per the terms of the note agreement as previously disclosed.

On July 8, 2024, we received a loan from a non-affiliated individual lender in the principal amount $350,000, and in connection therewith, the Company agreed to issue 15,982 ($35,000) restricted shares of the Company’s common stock.

As of September 30, 2024, these shares have not been issued and are accrued for in accounts payable until issued.

The loan bears interest at the rate of 10% per annum.

The loan originally matured on December 31, 2024 and 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 note 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 from the lender.

As previously disclosed, on May 23, 2024, we issued a promissory note to Ballengee Holdings, LLC, in the principal amount of up to $1,500,000, for which loan advances of $804,150 have been made to the Company.

Additionally, on July 5, 2024, the Company received a loan from Ballengee Holdings, LLC, in the principal amount of $500,000, and in connection therewith, we agreed to issue 21,552 ($50,000) restricted shares of the Company’s common stock, which is currently accrued in related party accounts payable in stock until the shares are issued.

The loan bears interest at the rate of 10% per annum.

The loan originally matured on December 31, 2024 and was amended on July 19, 2024 to mature on September 30, 2025.

As previously disclosed, on May 23, 2024, we issued a promissory note (the “Note”), to Ballengee Holdings, LLC, in the principal amount of up to $1,500,000, for which loan advances of $804,150 have been made to the Company.

The loan bears interest at the rate of 10% per annum.

The loan originally matured on December 31, 2024 and was amended on July 19, 2024 to mature on September 30, 2025.

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”).

On August 9, 2024, our subsidiary White Claw Colorado City, LLC (“WCCC”), entered into a supplement (“Supplement No.

4”) 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.

4, Maxus agreed to finance approximately $2.1 million for the build-out of certain equipment and facilities related to a pipeline extension at our WCCC facility in Texas.

Once the relevant equipment is constructed Maxus will own the addition and we will lease these additions from Maxus under the terms of Supplement No.

Under the terms of the lease, we expect our lease payments to Maxus to be approximately $ 32,161 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 $ 374,702 or lease-end option to purchase the facilities for the fair market value.

We anticipate that the lease will commence in the first quarter of 2025.

On June 18, 2024, our subsidiary WCCC, entered into a supplement (“Supplement No.

3”) to an existing Master Agreement (the “Master Agreement”) with 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 first quarter of 2025.

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.

As of September 30, 2024, we anticipate that this lease will now commence in the first quarter of 2025.

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’.

Because we were involved in the construction of the wash plant and the Texas pipeline extension, 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 and pipeline extension during the construction period.

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

The total of the projects’ construction costs have been capitalized and recorded to construction-in-process within ‘Property and equipment, net’.

The total $3.9 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.

On August 22, 2024, we entered into a new executive employment agreement with our Vice President, Marketing.

In addition, the employment agreement provides for annual incentive cash and equity compensation of up to $440,000 based on certain performance goals as further set forth therein.

As an inducement to enter into the executive employment agreement, the Vice President, Marketing is entitled to receive a one-time signing grant of Company common stock equivalent in value to $150,000, which are priced per share based on the closing price on the day of such grant (calculated to be 71,090 shares based on the effective date of the executive employment agreement).

Share-Based Compensation & Warrants

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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 2024, we issued additional stock awards for 450,244 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 three executed executive employment contracts.

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:

For the nine months ended September 30, 2024, stock-based compensation was $ 1,626,409 .

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

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

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

Schedule of option activity

Outstanding, December 31, 2023

Outstanding, June 30, 2024

Outstanding, September 30, 2024

Outstanding, December 31, 2022

Outstanding, June 30, 2023

Outstanding, September 30, 2023

Exercisable, December 31, 2023

Exercisable, June 30, 2024

Exercisable, September 30, 2024

Exercisable, December 31, 2022

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 .

Exercisable, September 30, 2023

As of September 30, 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.

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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 $ 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.

The Company recorded a provision for income taxes of $ 33,983 and $ 800 for the nine months ended September 30, 2024 and 2023, respectively.

The Company is projecting a ( - 0.73 % ) 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 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.

For the nine months ended September 30, 2024, we realized $ 115,000 in office sublease lease revenue from Spectra.

As of September 30, 2024, the Company is carrying accounts receivable of $ 137,000 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 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.

As of September 30, 2024 and 2023, we have accrued interest of approximately none and $ 232,745 owed on the note.

For the nine months ended September 30, 2024 and 2023, we made cash payments of $ 2,077,755 and $ 2,807,032 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 six months ended June 30, 2024 and 2023, we realized tank storage revenue of approximately $ 900,000 for each period.

For the nine months ended September 30, 2024 and 2023, we realized tank storage revenue of approximately $ 1,350,000 and $ 1,351,237 .

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 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 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.

For the nine months ended September 30, 2024 and 2023, we made crude oil purchases from WC Crude of $ 33,236,475 and $ 26,373,647 , respectively, and received deficiency payments of $ 661,186 and $ 364,309 , respectively.

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

During the third quarter of 2024, the Company entered into a Crude Petroleum Sales Agreement with WC Crude.

Both the WC Crude Crude Petroleum Sales Agreement and the existing WC Crude Crude Petroleum Supply Agreement(s) are cash net settled at market prices.

We produced and sold crude and natural gas liquids to WC Crude in the amount of $ 17,119,485 and $ 9,599,740 , respectively, for the nine months ended September 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 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 %

For the nine months ended September 30, 2024 and 2023, Endeavor rendered services in the amount of $ 596,341 and $ 254,946 , 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 % per annum.

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 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 enforceable.

As of September 30, 2024, the principal balance and accrued interest of this note was $ 804,150 and $ 21,274 .

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.

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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 .

As of September 30, 2024 the balance of principal and accrued interest was $ 1,115,849 and $ 6,695 .

On July 5, 2024, the Company received a loan from Ballengee Holdings, LLC, in the principal amount of $500,000, and in connection therewith, we agreed to issue 21,552 ($50,000) restricted shares of the Company’s common stock, which is currently accrued in related party accounts payable in stock until the shares are issued.

The loan bears interest at the rate of 10 % per annum.

The loan originally matured on December 31, 2024 and was amended on July 19, 2024 to mature on September 30, 2025.

As of September 30, 2024 the balance of principal and accrued interest was $ 500,000 and $ 11,957 .

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

Khalid Bin Jabir Al Thane, 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, 2024 and 2023, the balance owed was $ 395,036 and $ 365,857 , respectively.

Subsequent Events

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

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.

Acquisition of Endeavor Entities

On October 1, 2024, Jorgan Development, LLC, a Louisiana limited liability company (“Jorgan”) and JBAH Holdings, LLC, a Texas limited liability company (“JBAH” and, together with Jorgan, the “Sellers”), as the equity holders of Endeavor Crude, LLC, a Texas limited liability company, Equipment Transport, LLC, a Pennsylvania limited liability company, Meridian Equipment Leasing, LLC, a Texas limited liability company, and Silver Fuels Processing, LLC, a Texas limited liability company (collectively, the “Endeavor Entities”) closed the transactions that were the subject of the previously-disclosed Membership Interest Purchase Agreement among them dated March 21, 2024, as amended (the “MIPA”) (the “Closing”).

In accordance with the terms of the MIPA, at the Closing, the Company acquired all of the issued and outstanding membership interests in each of the Endeavor Entities (the “Membership Interests”), making them wholly-owned subsidiaries of the Company.

The Endeavor Entities own and operate a combined fleet of more than 500 commercial tractors and trailers for the hauling of crude oil and produced water.

On a daily basis, the trucking fleet hauls approximately 60,000 barrels of crude oil, tank bottoms, and petroleum wastes, and approximately 30,000 barrels of produced water.

In addition, the Endeavor Entities own and operate a crude oil shuttle pipeline and exclusive connected blending and processing facility in Blaine County, Oklahoma.

The purchase price for the Membership Interests is $ 120 million (the “Purchase Price”), subject to post-closing adjustments, including a reduction for assumed debt and a possible increase for an earn-out adjustment, payable by the Company in a combination of Company common stock, $ 0.001 par value per share (“Common Stock”) and Company Series A Preferred Stock $ 0.001 par value per share (“Preferred Stock”).

The Preferred Stock will have the terms set forth in the Series A Preferred Stock Certificate of Designations, including, but not limited to, liquidation preference over the Common Stock, the payment of a cumulative six percent (6%) annual dividend per share payable quarterly in arrears in shares of Common Stock (so long as such issuances of Common Stock would not result in the Sellers beneficially owning greater than 49.99% of the issued and outstanding Common Stock), and the Company having the right to convert the Preferred Stock at any time using the stated value of $1,000 per share of Preferred Stock and the conversion price of one dollar ($1.00) per share of Common Stock.

The Sellers are beneficially owned by James Ballengee, the Company’s chief executive officer and principal shareholder.

The Company is currently still calculating the reduction in the Purchase Price, as a result of Endeavor Entities debt that the Company assumed at Closing.

As a result of the Closing, the Company will issue to the Sellers, (i) a number of shares of Common Stock equal to an undivided nineteen and ninety-nine hundredths percent (19.99%) of all of the Company’s issued and outstanding Common Stock immediately prior to Closing, or a lesser percentage, if such issuance would result, when taking into consideration the percentage of Common Stock owned by Sellers prior to such issuance, in Sellers owning in excess of 49.99% of the Common Stock issued and outstanding on a post-Closing basis, with such shares of Common Stock valued at $1.00 per share (the “Common Stock Consideration”), and (ii) a number of shares of Preferred Stock equal to the Purchase Price, less the value of the Common Stock Consideration (the “Preferred Stock Consideration”).

Sellers will entered into 18-month lock-up agreements at Closing, with regard to the Common Stock Consideration and any Common Stock they receive during the lock-up period in connection with conversions of Preferred Stock or the payment of dividends on the Preferred Stock.

According to our Chief Financial Officer’s previously disclosed employment contract, upon the closing (October 1, 2024) of the Endeavor Entities, he will be paid $200,000, with $100,000 to be paid in cash and the remaining $100,000 to be paid in shares of the Company’s common stock, valued at approximately $1.89 per share.

Upon the Closing of our acquisition of the Endeavor Entities, the parties of that certain Membership Interest Purchase Agreement dated June 15, 2022, and the Amendment of Transaction Documents Related to Threshold Payment dated March 31, 2024 (together, the “2022 MIPA”), agreed that Section 8.7 Unwinding of the 2022 MIPA expired and is no longer enforceable.

As a result, the selling entities in the 2022 MIPA no longer have the right to unwind our acquisitions of White Claw Colorado City and Silver Fuels Dehli.

Executive Employment Agreements

In connection with the Closing of the Endeavor Entities on October 1, 2024, the Company entered into an executive employment agreement with Russ Shelton (the “Shelton Agreement”) with respect to the Company’s appointment of Mr.

Shelton as Executive Vice President and Chief Operating Officer of the Company.

Pursuant to the Shelton Agreement, Mr.

Shelton will receive (i) base salary compensation of $337,000 USD annually (the “Base Compensation”);

(ii) an annual cash and equity incentive compensation of up to $808,000 based upon certain performance criteria as more particularly described therein.

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

Shelton shall receive a one-time signing grant of Company common stock equivalent in value to $150,000, 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, subject to an eighteen (18)-month lockup period, which shall be granted promptly after the Effective Date, as defined therein.

Pursuant to the Shelton Agreement, Mr.

Shelton’s employment is at-will under Texas law, except as modified therein.

Shelton’s employment with Vivakor Administration, LLC, a subsidiary of the Company, began on October 1, 2024.

On October 1, 2024 (the “Effective Date”), Vivakor Administration, LLC, a subsidiary of Vivakor, Inc, entered into an executive employment agreement with Jeremy Gamboa as the Company’s Division President, Logistics (the “Gamboa Agreement”).

The Gamboa Agreement provides for an annual base salary of $ 325,000 and provides for annual incentive cash and equity compensation of up to $780,000, based on certain performance goals as further set forth therein.

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

Gamboa shall receive a one-time signing grant of Vivakor common stock equivalent in value to $150,000, which is priced per share based on the volume-weighted average price for the preceding five (5) trading days prior to the execution date of the Gamboa Agreement, subject to an eighteen (18) month lockup period and a conditional clawback obligation concurrent therewith, which shall be granted within thirty (30) days after the Start Date, as defined therein.

Pursuant to the Gamboa Agreement, Mr.

Gamboa’s employment is at-will under Texas law, except as modified therein.

Upon the Closing of our acquisition of the Endeavor Entities, a certain Subordinated Business Loan and Security Agreement by and between Agile Capital Funding, LLC and Agile Lending, LLC (the lenders and Endeavor Crude, LLC, Meridian Equipment Leasing, LLC, and Silver Fuels Processing, LLC (the borrowers) dated September 27, 2024 (the “Agile Agreement”) will be contained in our consolidated financial statements going forward.

Under the Agile Agreement, the listed borrowers received $1,420,000 in October 2024.

Loan and Security Agreement and Issuance of Secured Promissory Note

On October 31, 2024, Vivakor, Inc., as the borrower, and certain of its subsidiaries, being Vivaventures Management Company, Inc., Vivaventures Oil Sands, Inc., Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Vivaventures Remediation Corporation, Vivaventures Energy Group, Inc., Endeavor Crude, LLC, and Meridian Equipment Leasing, LLC, and Silver Fuels Processing, LLC, as guarantors (collectively, the “Guarantors” or “Subsidiaries”, as context requires), Cedarview Opportunities Master Fund LP, as the lender (the “Lender”);

and Cedarview Capital Management, LLC, as the agent (the “Agent”), entered into a Loan and Security Agreement (the “Loan Agreement”).

Pursuant to the Loan Agreement, the Company issued a secured promissory note (the “Note”) in the principal amount of $ 3,670,160 .77, and the Lenders agreed to provide such term loan to the Company (the “Term Loan”) with maturity on October 31, 2025.

On November 5 and 6, 2024, the Company received the net proceeds from the Term Loan less (i) a 3% origination fee, and (ii) repayment of $2,000,000 in outstanding principal, $68,009 in accrued interest, and a $242,991 prepayment fee pursuant to that certain Loan and Security Agreement dated February 5, 2024, by and between the Company, as borrower thereunder, certain of its Subsidiaries, as guarantors thereunder, and Lender and Agent (the “Previous Cedarview Loan”).

The amounts borrowed under the Loan Agreement will bear interest at a rate per annum of 22 % .

As a result, the Company will be obligated to make 12 equal monthly payments of $343,506.42 beginning November 30, 2024.

In the event of any prepayment, the Company shall pay a prepayment premium in the amount of ten percent (10%) of the balance of the Term Loan outstanding prior to such prepayment.

Notwithstanding the foregoing, if and when the Company raises in the aggregate $10,000,000 or more from the sale of its equity in sales (other than in connection with any acquisition, merger, or like transaction), the Company shall immediately offer to prepay the entire outstanding balance of the Term Loan, which offer may be accepted or rejected by the Agent.

In connection with the Loan Agreement, and as additional consideration for the Lender agreeing to loan funds to the Company thereunder, the Company issued an irrevocable letter to its transfer agent (the “Transfer Agent”) to reserve 3,000,000 shares of the Company’s common stock (the “Collateral Securities”) until the Term Loan is repaid in full.

In the event the Term Loan is not paid in full by the Maturity Date, the Agent may instruct the Transfer Agent to issue the Collateral Securities to the Agent, which the Agent may then sell until such time the amounts due under the Term Loan are repaid in full, after which any shares of Collateral Securities remaining shall be returned to the Company.

As a result of the Term Loan, and the use of proceeds of the Term Loan, the Previous Cedarview Loan has been paid in full and the irrevocable letter to the transfer agent regarding the Previous Cedarview Loan has been withdrawn.

In connection with the Closing of the Endeavor Entities on October 1, 2024, a certain Secured Promissory Note dated December 31, 2023, made by Meridian Equipment Leasing, LLC, as Borrower (“Borrower”), to the order of Pilot OFS Holdings LLC, as Lender (“Lender”), in the original principal amount of $ 12,500,000 plus the sum of $500,000 (the “Note”) will be contained in our consolidated financial statements going forward.

On October 1, 2024, the parties entered into a Letter Agreement regarding the Secured Promissory Note and related Loan Documents, which stipulates and agrees the amount outstanding pursuant to a certain AR Assignment (also acquired through the close of the Endeavor Entities) is equal to $2,910,574.

Upon the full and final closing and initial funding of a revolving line of credit from a specific lender, Borrower shall cause to be paid to Lender the outstanding AR balance of $2,910,574, plus interest at a rate of one and one-half percent (1.5%) per month on all amounts outstanding from July 1, 2024 through the date of repayment, no later than the close of business two (2) business days thereafter.

Borrower shall also cause to be paid $57,750, representing all amounts currently due and owing under the Truck Yard Leases (as defined below), all of which is stipulated and agreed to in exchange for the Lender entering into two amended secured promissory notes that extends the maturity dates of the loans to December 31, 2024, and the agree that the Truck Yard Leases are considered terminated effective as of September 30, 2024, which includes (a) that certain Lease Agreement dated effective December 31, 2023, by and between Borrower, as Tenant, and Pilot Travel Centers LLC, as Landlord, covering certain real property located at 306 E.

Greene St., Carlsbad, New Mexico 88220, as amended, (b) that certain Lease Agreement dated effective December 31, 2023, by and between Borrower, as Tenant, and Pilot Travel Centers LLC, as Landlord, covering certain real property located at 2260 US 181, Hobson, Texas 78117, as amended, and (c) that certain Lease Agreement dated effective December 31, 2023, by and between Borrower, as Tenant, and Pilot Travel Centers LLC, as Landlord, covering certain real property located at 620 S CR 153, Kenedy, Texas 78119, as amended (collectively, the “Truck Yard Leases”).

In connection with the Closing of the Endeavor Entities on October 1, 2024, a certain Repair and Maintenance Subscription Plan dated October 1, 2024 was entered into between Horizon Truck and Trailer, LLC, which is a related party as our Chief Executive Officer is the beneficiary, and Meridian Equipment Leasing, LLC (“MEL”) for the maintenance and repairs of all commercial trailers and tractors owned, leased, or controlled by MEL, which includes a $100,000 monthly retainer that is credited against open monthly charges and invoices.

On October 17 2024, our newly acquired subsidiaries under the Endeavor Entities, received funding of $ 530,000 under our May 14, 2024 promissory note between Vivakor, Inc.

and Ballengee Holdings, LLC, of which our Chief Executive Officer is the beneficial owner.

The Company also made payments of $ 530,000 on this promissory note in October 2024.

See Note 6 for further information regarding the promissory note between Ballengee Holdings, LLC and Vivakor, Inc.

On October 29, 2024, our subsidiary Meridian Equipment Leasing LLC (“MEL”), which subsidiary was acquired on October 1, 2024 in the acquisition of the Endeavor Entities, entered into a supplement (“Supplement No.

21”) to an existing Master Agreement (the “Master Agreement”) with Maxus Capital Group, LLC (“Maxus”).

Under Supplement No.

21, Maxus agreed to finance approximately $1.5 million for the build-out of a pipeline at our acquired pipeline facility in Oklahoma.

Once the pipeline is constructed Maxus will own the addition and we will lease these additions from Maxus under the terms of Supplement No.

Under the terms of the lease, we expect our lease payments to Maxus to be approximately $41,522 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 $484,111 or lease-end option to purchase the facilities for the fair market value.

We anticipate that the lease will commence in the first quarter of 2025.

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