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Item 2. Unregistered Sales of Equity Securities

2024-11-19 compared with 2024-08-16 · 41 added, 14 removed, 7 unchanged (89% of the section changed)

2 unchanged sentences

Except where noted, all of the securities discussed in this Item 2 were all issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

As previously disclosed by us in a Current Report on Form 8-K filed with the SEC on February 2, 2024, we received a loan from a non-affiliated individual lender in the principal amount of $1,000,000 (the “Loan”) and, in connection therewith, we agreed to issue 100,000 restricted shares of the Company’s common stock.

The Loan bears interest at the rate of 10% per annum, matures on December 31, 2024.

We issued a promissory note dated December 5, 2023 in connection with the Loan (the “Original Note”).

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

The convertible promissory note replaces 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 our 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 our 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.

On June 3, 2024, the Company entered into a Director Agreement with Michael Thompson (the “Thompson Director Agreement”).

Pursuant to the Thompson Director Agreement, effective June 3, 2024, Mr.

Thompson agreed to serve as a member of the Company’s Board of Directors and the chair of the Audit Committee and would receive $50,000 in shares of restricted stock annually as part of his compensation, vesting quarterly and valued at the stock price on the date of grant.

Thompson also received a one-time grant of 50,000 shares of the Company’s common stock under the Company’s 2023 Equity and Incentive Plan.

As previously disclosed herein, on June 26, 2024 the Company entered into the Knapp Agreement.

As part of Mr.

Knapp’s compensation under the Knapp Agreement, Mr.

As part of the compensation the Company owes Patrick Knapp’s under his Employment 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 shall be granted within thirty (30) days after the Start Date, as defined therein.

On July 8, 2024, Vivakor, Inc.

received a loan from a non-affiliated individual lender in the principal amount of Three Hundred Fifty Thousand Dollars ($350,000) (the “First Loan”) and, in connection therewith, the Company agreed to issue 15,982 restricted shares of the Company’s common stock.

The First Loan bears interest at the rate of 10% per annum, matures on December 31, 2024, with all unconverted principal due on the maturity date and interest payable monthly on the last day of the month after the month in which the interest accrued.

The Company issued a promissory note dated July 5, 2024 in connection with the First Loan (the “First Note”).

The First Note allows the holder to convert the outstanding principal and interest due under the First 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 First 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.

The Company will issue the 15,982 shares in the near future.

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

The BH Loan bears interest at the rate of 10% per annum, matures on December 31, 2024, with all unconverted principal due on the maturity date and all unconverted interest payable monthly on the last day of the month after the month in which the interest accrued.

The Company issued a promissory note dated July 9, 2024 in connection with the BH Loan (the “BH Note”).

The BH Note allows the holder to convert the outstanding principal and interest due under the BH 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 BH 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.

The Company will issue the 21,552 shares in the near future.

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 in thirty (30) days.

The 50,000 shares of common stock will be issued in the near future.

On July 26, 2024, the Company entered into that certain Securities Purchase Agreement and Strata Purchase Agreement (the “ClearThink Agreements”) with ClearThink Capital Partners, LLC.

Under the terms of the ClearThink Agreements, the Company agreed to issue ClearThink Capital (i) 67,568 shares of common stock in exchange for $125,000 upon the entry into the relevant term sheet (ii) 67,568 shares of common stock upon filing of the relevant S-1 Registration Statement, and (iii) 150,000 shares of common stock upon entry of the Strata Purchase Agreement.

As a result, the Company has issued 217,568 to ClearThink.

On July 26, 2024, the Company entered into a Securities Purchase Agreement with James K.

Granger (the “SPA” and “Granger”, respectively), under which Granger, or an entity he controls, purchased 1,600,000 common shares of the Company’s stock for $800,000, at a price of $0.50 per common share.

Pursuant to the SPA, the shares issued to Granger will be subject to Rule 144 restrictions.

Granger funded the purchase price in cash to the Company on July 31, 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 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).

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.

On September 5, 2024, the Company closed on a Securities Purchase Agreement with E-Starts Money Co., a Delaware corporation (the “SPA” and “E-Starts”, respectively) dated August 28, 2024, under which E-Starts, purchased 1,000,000 shares of the Company’s common stock for $500,000, at a price of $0.50 per common share.

Pursuant to the SPA, the shares issued to E-Starts will be subject to standard Rule 144 restrictions.

E-Starts is controlled by William Tuorto, who also is a control person of Empire Diversified Energy, Inc., (“Empire”), serving as its Executive Chairman and Chairman of the Board of Directors.

As previously disclosed in the Company’s Current Report on Form 8-K filed with the Commission on March 1, 2024 (the “March 8-K”), we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Empire under which Empire will merge with and into a subsidiary of the Company and Empire will become a wholly-owned subsidiary of the Company if the parties close the transaction contemplated by the Merger Agreement.

There is no guarantee that the transactions contemplated by the Merger Agreement will close.

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

Trading & Cont.

(“DIC”), exercised its 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 our June 20, 2023 secured promissory note with DIC.

Under the terms of the stock option, DIC used as consideration for the stock option, a reduction of principal and interest under its Note in the amount of $1,179,000.

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 any remaining portion of note is anticipated to be paid out of operations of the RPC per the terms of the note agreement as previously disclosed.

DEFAULTS UPON SENIOR SECURITIES

2 unchanged sentences

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 2. Unregistered Sales of Equity Securities