Vivakor, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS VIVAKOR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 765,366 $ 651,022 Cash- restricted 4,023,417 3,025,970 Accounts receivable 12,933,776 1,626,994 Accounts receivable- related party 4,508,232 4,599,094 Prepaid expenses 3,859,479 1,204,790 Marketable securities 2,313,855 661,101 Inventories 132,324 205,529 Total current assets 28,536,449 11,974,500 Other assets 3,473,483 3,608,067 Notes receivable 245,020 242,714 Property and equipment, net 92,661,561 100,039,371 Right of use assets- operating leases 4,449,272 4,920,454 Intellectual property, net 8,142,220 8,348,703 Customer relationships, net 41,813,052 43,021,022 Goodwill 68,885,853 68,885,853 Total assets $ 248,206,910 $ 241,040,684 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 43,629,485 $ 29,601,665 Accounts payable and accrued expenses- related parties 2,416,728 831,984 Accrued compensation 1,373,536 1,249,099 Unearned revenue 9,107,297 9,107,297 Operating lease liabilities, current 2,611,259 2,636,151 Finance lease liabilities, current 4,063,363 4,267,396 Loans and notes payable, current 42,640,002 42,423,941 Loans and notes payable, current- related parties 21,570,295 21,810,164 Total current liabilities 127,561,760 111,927,697 Operating lease liabilities, long term 1,564,735 2,190,351 Finance lease liabilities, long term 4,359,961 5,135,601 Loans and notes payable, long term 5,948,617 6,514,010 Deferred tax liability 154,381 154,381 Total liabilities 139,439,659 125,922,040 Stockholders’ equity: Preferred stock, $ 0.001 par value; 15,000,000 shares authorized, 107,789 and none outstanding as of March 31, 2025 and December 31, 2024 $ 108 108 Common stock, $ 0.001 par value; 200,000,000 shares authorized; 45,003,523 and 41,709,190 were issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 45,003 41,709 Additional paid-in capital 210,935,247 208,167,537 Treasury stock, at cost ( 20,000 ) ( 20,000 ) Accumulated deficit ( 98,067,305 ) ( 88,951,426 ) Total Vivakor, Inc. stockholders’ equity 112,893,053 119,237,928 Noncontrolling interest ( 4,125,802 ) ( 4,119,284 ) Total stockholders’ equity 108,767,251 115,118,644 Total liabilities and stockholders’ equity $ 248,206,910 $ 241,040,684 See accompanying notes to consolidated financial statements 1 VIVAKOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) March 31, 2025 2024 Revenues Terminaling and storage $ 21,826,502 $ 12,913,165 Terminaling and storage- related party 2,037,534 3,108,226 Transportation logistics 10,962,014 - Transportation logistics- related party 2,514,241 - Total revenues 37,340,291 16,021,391 Cost of revenues 32,581,857 14,953,254 Gross profit 4,758,434 1,068,137 Operating expenses: Sales and marketing - 11,040 General and administrative 5,369,313 1,664,966 Amortization and depreciation 5,831,602 1,009,053 Total operating expenses 11,200,915 2,685,059 Loss from operations ( 6,442,481 ) ( 1,616,922 ) Other income (expense): Unrealized gain (loss) on marketable securities 1,652,754 ( 82,638 ) Loss on disposition of asset ( 1,597,913 ) - Gain on deconsolidation of subsidiary - 177,550 Interest income 25,482 2,307 Interest expense ( 1,131,077 ) ( 444,040 ) Interest expense- related parties ( 53,121 ) - Other income 12,540 54,000 Total other income (expense) ( 1,091,335 ) ( 292,821 ) Loss before provision for income taxes ( 7,533,816 ) ( 1,909,743 ) Provision for income taxes - ( 800 ) Consolidated net loss ( 7,533,816 ) ( 1,910,543 ) Less: Net loss attributable to noncontrolling interests ( 6,518 ) ( 28,308 ) Net loss attributable to Vivakor, Inc. $ ( 7,527,298 ) $ ( 1,882,235 ) Series A Preferred Stockholder Dividends $ 1,588,581 $ - Net loss to common shareholders ( 9,115,879 ) ( 1,882,235 ) Basic and diluted net loss per share $ ( 0.21 ) $ ( 0.07 ) Basic weighted average common shares outstanding 43,076,850 26,391,937 See accompanying notes to consolidated financial statements 2 VIVAKOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Series A Preferred Stock Common Stock Additional Paid-in Treasury Accumulated Non-controlling Total Stockholders’ Shares Amount Shares Amount Capital Stock Deficit Interest Equity December 31, 2024 107,789 $ 108 41,709,190 $ 41,709 $ 208,167,537 $ ( 20,000 ) $ ( 88,951,426 ) $ ( 4,119,284 ) $ 115,118,644 Issuance of common stock for a reduction of liabilities - - 227,069 227 380,773 - - - 381,000 Stock based compensation - - 553,072 553 500,870 - - - 501,423 Stock based compensation- Consultant - - 447,761 448 299,552 - - - 300,000 Common stock distributable- Series A Preferred Stock Dividends - - 2,066,431 2,066 1,586,515 - ( 1,588,581 ) - - Net loss - - - - - - ( 7,527,298 ) ( 6,518 ) ( 7,533,816 ) March 31, 2025 (unaudited) 107,789 $ 108 45,003,523 $ 45,003 $ 210,935,247 $ ( 20,000 ) $ ( 98,067,305 ) $ ( 4,125,802 ) $ 108,767,251 Series A Preferred Stock Common Stock Additional Paid-in Treasury Accumulated Non-controlling Total Stockholders’ Shares Amount Shares Amount Capital Stock Deficit Interest Equity December 31, 2023 - $ - 26,220,508 $ 26,221 $ 83,097,553 $ ( 20,000 ) $ ( 65,908,406 ) $ 41,821 $ 17,237,189 Issuance of common stock for a reduction of liabilities - - 300,000 300 285,000 - - - 285,300 Stock based compensation - - - - 327,985 - - - 327,985 Net loss - - - - - - ( 1,882,235 ) ( 28,308 ) ( 1,910,543 ) March 31, 2024 (unaudited) - $ - 26,520,508 $ 26,521 $ 83,710,538 $ ( 20,000 ) $ ( 67,790,641 ) $ 13,513 $ 15,939,931 See accompanying notes to consolidated financial statements 3 VIVAKOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) March 31, 2025 2024 OPERATING ACTIVITIES: Consolidated net loss $ ( 7,533,816 ) $ ( 1,910,543 ) Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 5,831,602 1,009,053 Stock-based compensation 501,423 327,985 Stock-based compensation- consultant 300,000 - Unrealized (gain) loss- marketable securities ( 1,652,754 ) 82,638 Loss on disposition of assets 1,597,913 - Gain on deconsolidation of subsidiary - ( 177,550 ) Changes in operating assets and liabilities: Accounts receivable ( 11,215,920 ) ( 1,551,490 ) Prepaid expenses ( 2,654,689 ) ( 91,393 ) Inventory 73,205 ( 13,148 ) Other assets 767,099 ( 115,742 ) Right of use assets- operating leases 471,182 89,876 Operating lease liabilities ( 650,508 ) ( 91,163 ) Accounts payable and accrued expenses 12,983,336 426,581 Interest on notes receivable ( 2,306 ) ( 2,307 ) Interest on notes payable 1,184,198 187,524 Net cash used in operating activities ( 35 ) ( 1,829,679 ) INVESTING ACTIVITIES: Proceeds from the sale of vehicles and trailers 1,482,000 - Purchase of equipment - ( 1,028,885 ) Net cash provided (used) in investing activities 1,482,000 ( 1,028,885 ) FINANCING ACTIVITIES: Payment on financing lease liabilities ( 979,673 ) ( 115,976 ) Proceeds from loans and notes payable 4,599,111 3,002,192 Proceeds from loans and notes payable- related party 1,664,150 - Payment of notes payable ( 4,489,161 ) - Payment of notes payable- related party ( 1,164,601 ) ( 4,686 ) Net cash provided (used) by financing activities ( 370,174 ) 2,881,530 Net increase in cash and cash equivalents 1,111,791 22,966 CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, BEGINNING OF PERIOD 3,676,992 744,307 CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, END OF PERIOD $ 4,788,783 $ 767,273 SUPPLEMENTAL CASHFLOW INFORMATION: Cash paid during the year for: Interest $ 218,014 $ 2,193 Income taxes $ - $ - Noncash transactions : Accounts payable on purchase of equipment $ 414,459 $ 1,207,577 Capitalized interest on construction in process $ - $ 318,447 Common stock issued with debt $ 250 $ 285,300 Common stock issued for a reduction in liabilities $ 381,000 $ - Series A preferred shareholder stock dividend $ 1,588,581 $ - See accompanying notes to consolidated financial statements 4 VIVAKOR, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation 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. 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, 2024 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, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025. Business 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 two main segments: (i) transportation logistics services and (ii) terminaling and storage facility product and services related to oil and gas production. Our transportation and facilities services primarily consist of trucking crude oil and produced water and transportation and terminaling services of crude oil via the Omega Gathering Pipeline. Our trucking services are centered in the Permian and Eagle Ford Basins. We utilize our trucking fleet to transport those products to a fully-integrated network of facilities where we blend various grades of crude oil grades of crude oil, and reuse or dispose of produced water. Our terminaling and storage product and services primary consist of two operational major crude oil terminaling facilities. One is located in Colorado City, Texas, and the other facility is located in Delhi, Louisiana. Both facilities are located at the junction of several major interstate pipelines, receive various grades of crude oil from our customers. These crude oil terminals are industrial facilities that serve as hubs for the storage, handling and distribution of crude oil and petroleum products We plan to perform remediation services utilizing our remediation processing centers (“RPCs”) at some point in the future. We are currently constructing a full-capacity RPC at the San Jacinto River & Rail Park in Harris County, Texas. Once complete, we anticipate the strategically located facility to be capable of processing oilfield solid wastes into economic byproducts such as condensate, propane, and butane. This RPC will feature an adjacent, complimentary truck wash facility from which we expect to derive additional revenue. On October 1, 2024, we acquired 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 with their subsidiaries, the “Endeavor Entities”), making those entities wholly-owned subsidiaries, which gave us operations in several different areas of the midstream oil and gas industry. Our management and Board of Directors is currently reviewing all aspects of the Endeavor Entities’ assets and operations, including the synergies they have with our pre-acquisition operations and the debt related to certain of those assets and operations. In the event our management and Board of Directors determines some of those assets or operations do not fit organizationally with our other assets and operations then we may seek strategic alternatives with those certain assets and/or operations. 5 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. Reclassifications Certain reclassifications have been made to prior years’ purchase price allocation of accrued interest and principal note payable amounts to conform to the 2025 presentation. Restricted Cash The Company acquired an accounts receivable factoring agreement on October 1, 2024 in the acquisition of the Endeavor Entities, where the Company is required to maintain a reserve account with the factoring institution which is included as restricted cash. Long Lived Assets The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. For the three months ended March 31, 2025, the Company evaluated, and determined that there was no trigger event, and therefore no impairment incurred. 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. Intangible Assets and Goodwill We account for intangible assets and goodwill in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). We assess our intangible assets in accordance with ASC 360 “ Property, Plant, and Equipment ” (“ASC 360”). Impairment testing is required when events occur that indicate an asset group may not be recoverable (“triggering events”). As detailed in ASC 360-10-35-21, the following are examples of such events or changes in circumstances (sometimes referred to as impairment indicators or triggers): (a) A significant decrease in the market price of a long-lived asset (asset group) (b) A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition. (c) A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator (d) An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) (e) A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) (f) A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. 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, 2025. 6 Revenue Recognition For the three months ended March 31, 2025, our sales consisted of storage services and the sale of crude oil or like products and transportation logistic services. For the three months ended March 31, 2025 and 2024, disaggregated revenue by customer type was as follows: $ 23,864,036 and $ 16,021,391 in terminaling and storage and $ 13,476,255 and none in Transportation Logistics. During the fourth quarter of 2024, the Company entered into a Crude Petroleum Sales Agreement with third parties for the purchase and sale of crude petroleum products in North Dakota. The Company realized sales of $ 13,269,810 from these contracts for the three months ended March 31, 2025. Related Party Revenues Our revenue from related parties for the three months ended March 31, 2025 and 2024 was $ 4,551,775 and $ 3,108,226 . We sell crude oil or like products and provide storage services to related parties under long-term contracts. We acquired these contracts in our August 1, 2022 acquisition of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC and our October 1, 2024 acquisition of Silver Fuels Processing, LLC. These contracts were entered into in the normal course of our business. We also provide pipeline throughput and trucking logistics services to related parties under long-term contracts. We acquired these contracts in our October 1, 2024 acquisition of Endeavor Crude, LLC, Meridian Equipment Leasing, LLC. These contracts were entered into in the normal course of our business. Major Customers and Concentration of Credit Risk The Company has two major customers, which account for approximately 30.65 % and 100 % of the balance of accounts receivable as of March 31, 2025 and 2024. Our two major customers (one of which is a related party) account for approximately 15.29 % and 99 % of the Company’s revenues for the three months ended March 31, 2025 and 2024. Advertising Expense Advertising costs are expensed as incurred. The Company did not incur advertising expense for the three months ended March 31, 2025 and 2024. Net Income/Loss Per Share Basic net income (loss) per share is calculated by subtracting any preferred interest distributions from net income (loss), all divided by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method if their effect is dilutive. Potential dilutive instruments 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 and three months ended March 31, 2025 and 2024 our potential dilutive instruments were excluded from the weighted-average calculation as they were antidilutive. Potential dilutive instruments as of March 31, 2025 and 2024 include the following: convertible notes payable, which are convertible into approximately 10,471,437 and 224,560 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 2,420,081 and 2,281,673 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 479,685 and 690,304 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, which such stock option was exercised in September 2024 for a reduction in debt. The Company also had warrants outstanding to purchase 399,040 and 80,000 shares of common stock as of March 31, 2025 and 2024. 7 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. 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. Fair Value of Financial Instruments The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the consolidated balance sheets for marketable securities are classified as Level 1 assets due to observable quoted prices for identical assets in active markets. The carrying amounts reported in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their estimated fair market values based on the short-term maturity of these instruments. The recorded values of notes payable approximate their current fair values because of their nature, rates, and respective maturity dates or durations. 8 Note 2. Going Concern & Liquidity We have historically suffered net losses and cumulative negative cash flows from operations, and as of March 31, 2025, we had an accumulated deficit of approximately $98 98,067,305 million. As of March 31, 2025 and December 31, 2024, we had a working capital deficit of approximately $ 99 million and $ 101.5 million, respectively. As of March 31, 2025, we had cash of approximately $ 4.8 million, of which $4 million is restricted cash. In addition, we have obligations to pay approximately $64.2 million of debt within one year of the issuance of these financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. During the three months ended March 31, 2025, subject to available cash flows, the Company continued its strategy to monetize its intellectual properties and execute its business plan, including the operation of the Endeavor Entities which were acquired in the fourth quarter of 2024. To date we have financed our operations primarily through our operations, debt financing, and private and public equity offerings. Based on the above, we believe there is substantial doubt about the Company’s ability to continue as a going concern. The Company has prepared the consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity. Management cannot provide any assurance that the Company will 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. Note 3. Property and Equipment The following table sets forth the components of the Company’s property and equipment at March 31, 2025 and December 31, 2024: Schedule of property and equipment, net March 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated Depreciation Net Book Value Gross Carrying Amount Accumulated Depreciation Net Book Value Vehicles and trailers $ 27,405,817 $ ( 3,640,058 ) $ 23,765,759 $ 30,485,730 $ ( 1,856,461 ) $ 28,629,269 Equipment 339,610 ( 64,518 ) 275,092 339,610 ( 33,069 ) 306,541 Land 732,000 - 732,000 732,000 - 732,000 Building 1,630,000 ( 328,852 ) 1,301,148 1,630,000 ( 164,426 ) 1,465,574 Crude & NGL terminal and related equipment 930,460 ( 600,876 ) 329,584 930,460 ( 566,835 ) 363,625 Crude Oil Transfer Stations 6,570,080 ( 1,798,266 ) 4,771,814 6,570,080 ( 899,133 ) 5,670,947 Pipeline and related facilities 42,244,680 ( 1,543,088 ) 40,701,592 42,244,680 ( 771,544 ) 41,473,136 Finance lease- Right of use assets 12,593,359 ( 5,391,175 ) 7,202,184 12,593,359 ( 4,367,820 ) 8,225,539 Construction in process: Wash Plant Facilities 6,271,259 - 6,271,259 5,997,566 - 5,997,566 Remediation Processing Unit System A 2,892,343 - 2,892,343 2,892,343 - 2,892,343 Remediation Processing Unit System B 2,892,343 - 2,892,343 2,892,343 - 2,892,343 WCCC Tank Expansion 1,526,443 - 1,526,443 1,390,488 - 1,390,488 Total fixed assets $ 106,028,394 $ ( 13,366,833 ) $ 92,661,561 $ 108,698,659 $ ( 8,659,288 ) $ 100,039,371 For the three months ending March 31, 2025 and 2024, depreciation expense was $ 3,527,645 and $ 37,151 . During the three months ended March 31, 2025, we sold vehicles and trailers which cost $ 4,319,000 and had a net book value of $ 3,079,913 at a loss of $ 1,597,913 . The proceeds of $1,482,000 from these sales was used to pay down our notes payable Note 5). Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service. Equipment that is temporarily not in service is not depreciated until placed into service. 9 Note 4. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: Schedule of accounts payable and accrued expenses March 31, December 31, 2025 2024 Accounts payable $ 41,774,338 $ 27,793,637 Accrued interest (various notes and loans payable) 1,017,670 970,551 Accrued tax penalties and interest 837,477 837,477 Accounts payable and accrued expenses $ 43,629,485 $ 29,601,665 Schedule of accounts payable and accrued expenses related parties March 31, December 31, 2025 2024 Accounts payable- related parties $ 2,321,673 $ 715,526 Accrued interest (notes payable)- related parties 95,055 116,458 Accounts payable and accrued expenses- related parties $ 2,416,728 $ 831,984 Accrued compensation $ 1,373,536 $ 1,249,099 For the three months ended March 31, 2025, 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 March 31, 2025 and December 31, 2024, our accounts payable are primarily made up of trade payables. As of March 31, 2025 and December 31, 2024, trade accounts payables in the amount of $ 2,321,673 and $ 3,433,706 is with a vendor who our CEO or an executive is a beneficiary of. As of March 31, 2025 and December 31, 2024, accounts payable related to consulting services rendered of none and $ 252,777 , are with a vendor who our CEO is a beneficiary of. As of March 31, 2025, accrued compensation to current employees includes $ 185,676 in accrued vacation pay due to our Chief Executive Officer, which may be payable in cash or stock if unused, and $ 287,105 due to our Chief Financial Officer, which includes $ 114,226 in accrued sick and vacation pay is payable in cash if unused and $ 100,000 in accrued bonuses. Accrued compensation includes prorated year end accrued cash bonuses that are considered probable. 10 Note 5. Loans and Notes Payable Loans and notes payable and their maturities consist of the following: Third party debt: Schedule of loans and notes payable March 31, 2025 December 31, 2024 Various promissory notes and convertible notes $ 50,960 $ 50,960 Various promissory notes for vehicle financing 423,929 445,917 Blue Ridge Bank 410,200 410,200 Small Business Administration 2,312,006 2,389,022 Al Dali International for Gen. Trading & Cont. Co. 205,614 189,391 RSF, LLC 500,000 500,000 Justin Ellis 350,000 350,000 Cedarview Opportunities Master Fund LP 3,038,597 2,886,307 Business First Bank 9,391,933 10,842,312 Note payable to Pilot OFS Holdings, LLC 16,619,526 16,619,526 Maxus Capital Group, LLC 9,257,161 10,513,507 Curve Capital, LLC 930,418 2,103,954 Agile Capital Funding, LLC 498,764 1,636,855 JJ Astor & Co. (a) 4,599,511 - Total notes payable $ 48,588,619 $ 48,937,951 Loans and notes payable, current $ 42,640,002 $ 42,423,941 Loans and notes payable, long term $ 5,948,617 $ 6,514,010 11 Related party debt: Schedule of loans and notes payable related parties March 31, 2025 December 31, 2024 Jorgan Development, LLC (l) $ 17,658,421 18,109,503 Ballengee Holdings, LLC (m) 1,563,150 1,391,650 Tyler Nelson (n) 856,271 1,020,872 Triple T Trading Company LLC 413,166 404,121 Waskom, LLC (o) 1,079,287 884,018 Total notes payable- related parties $ 21,570,295 $ 21,810,164 Loans and notes payable, current- related parties $ 21,570,295 $ 21,810,164 Loans and notes payable, long term- related parties $ - $ - Schedule of maturities of loans and notes payable 2025 $ 64,210,297 2026 5,563,208 2027 88,302 2028 25,788 2029 25,788 Thereafter 245,531 Total $ 70,158,914 (a) On March 17, 2025, the Company issued a junior secured convertible promissory note due to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000, in connection with a Loan and Security Agreement entered into by and between the Company, its subsidiaries, and the Lender. The Company received $5,000,000, before deduction of closing fees. The note is payable to the Lender over forty-two equal weekly installments of $157,739, which may be paid in cash or, at the option of the Company once an applicable resale registration statement covering the conversion shares is declared effective by the SEC, in free trading shares of its common stock issued at a twenty percent (20%) discount to the lower of either the previous day’s closing price or the average of the four lowest volume-weighted average prices during the prior twenty (20) trading days. The note does not bear interest unless an event of default shall occur and is continuing. The Company agreed to issue the Lender 250,000 shares of its common stock as additional consideration for the loan. Note 6. Commitments and Contingencies On February 11, 2025, we entered into a Consulting Agreement with WSGS, LLC for management consulting services. Under the terms of the Consulting Agreement, we will pay the consultant up to $1.3 million per year, payable in registered shares of our common stock under our 2023 Equity Incentive Plan. The Consulting Agreement is for an initial term of one year, with the option for a second year. The principal of WSGS, LLC is also a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that we entered into an Agreement and Plan of Merger with on February 26, 2024, but has not closed, and E-Starts Money Co., a Delaware corporation, which is an investor in our common stock. On February 10, 2025, we entered into a Side Letter related to our Executive Employment Agreement with our Chief Financial Officer, and dated June 13, 2024 and the Promissory Note issued to Mr. Nelson dated June 13, 2024, under which we amended and clarified Mr. Nelson’s Employment Agreement and the Promissory Note to (i) clarify that effective October 1, 2024, Mr. Nelson’s Employment Agreement is with Vivakor Administration, LLC with all material obligations guaranteed by us, (ii) confirming the Promissory Note is still our primary obligation; (iii) confirming the payment obligations of the company are triggered but not just fund raising by the company but also fundraising by our subsidiaries, that the maturity date under the Promissory Note is extended until June 30, 2025, and that a 5% fee will be assessed on the outstanding principal and interest due under the Promissory Note as of December 31, 2024 as a result of the Promissory Note not being paid by December 31, 2024, and (iv) to clarify that no taxable event will occur related to amounts due under the Promissory Note until those amounts are actually paid by the Company to Mr. Nelson. 12 On February 10, 2025, we entered into an Amendment No. 1 to our Employment Agreement with Mr. Les Patterson, our Vice President, Operations & Construction. Mr. Patterson’s Employment Agreement misstated Mr. Patterson’s annual equity compensation, which was agreed to be annual equity compensation equal to not less than $100,000 to be paid in equal quarterly installments of $25,000 based on a valuation formula set forth in the Employment Agreement, but was mistakenly drafted as annual equity compensation equal to not less than $25,000 to be paid in equal quarterly installments based on a valuation formula set forth in the Employment Agreement. As a result of the Amendment No. 1 to the Employment Agreement we issued Mr. Patterson 74,701 additional shares of our common stock, which is valued at $75,000 based on the valuation formula in Mr. Patterson’s Employment Agreement. These shares were issued unrestricted under the Company’s 2023 Equity and Incentive Plan as registered on Form S-8. On February 10, 2025, we entered into an Employment Agreement with Andre Johnson to be our Vice President, Human Resources As part of Mr. Johnson’s compensation we agreed to issue him 302,297 shares of our common stock as a signing bonus, as well as $75,000 worth of our common stock annually, paid in equal quarterly installments. These shares are due to be issued unrestricted under the Company’s 2023 Equity and Incentive Plan as registered on Form S-8. Note 7. Share-Based Compensation & Warrants Stock Options & Awards Generally accepted accounting principles require share-based payments to employees, including grants of employee stock options, warrants, and common stock to be recognized in the income statement based on their fair values at the date of grant, net of estimated forfeitures. The Company has granted stock-based compensation to employees, including 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 2025, we issued additional stock awards to our Chief Executive Officer, of 160,266 shares of our common stock (net of tax withholdings) under the terms of his employment agreement for his services rendered from October 28, 2024 to January 27, 2025. Based on the renewal of the CEO’s employment agreement, we owe Mr. Ballengee 688,891 shares of Common Stock for his employment period beginning October 28, 2024 through October 27, 2025, to be paid in three equal quarterly installments of 172,222 shares of Common Stock, and one installment of 172,225 shares (prior to tax withholdings). Under our employment agreement with our Chief Financial Officer, he is due bonuses at various times and/or upon certain events happening, namely an annual cash incentive bonus for December 31, 2024 of $ 225,000 , an annual equity incentive bonus of $ 112,500 , and a bonus for the close of the acquisition of the Endeavor Entities of $ 100,000 paid in stock, totaling $ 437,500 , due in shares of common stock, which total 462,462 shares of common stock (prior to tax withholdings) based on the employment agreement. We issued stock for these bonuses in February 2025, and issued 105,213 shares after tax withholdings. On February 10, 2025, we entered into an Amendment No. 1 to our Employment Agreement with our Vice President, Operations & Construction, which issued 74,701 additional shares of our common stock, which is valued at $ 75,000 . We also have quarterly stock issuances to independent board members as part of their compensation, which included 32,421 shares to be issued for the three months ended March 31, 2025. In 2024, we issued additional stock awards that vest quarterly in conjunction with annual compensation for current and a new Board of Direct compensation, and one employment contract. For the three months ended March 31, 2025, stock-based compensation was $ 501,423 . On February 11, 2025, we entered into a Consulting Agreement with WSGS, LLC for management consulting services. Under the terms of the Consulting Agreement, we will pay the consultant up to $1.3 million per year, payable in registered shares of our common stock under our 2023 Equity Incentive Plan. The Consulting Agreement is for an initial term of one year, with the option for a second year. The principal of WSGS, LLC is also a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that we entered into an Agreement and Plan of Merger with on February 26, 2024, but has not closed, and E-Starts Money Co., a Delaware corporation, which is an investor in our common stock. Consulting stock-based compensation was $ 300,000 for the three months ended March 31, 2025. 13 There were no other options or awards granted during the three months ended March 31, 2025. The following table summarizes all stock option activity of the Company for the three months ended March 31, 2025 and 2024: Schedule of option activity Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding, December 31, 2024 1,721,761 $ 2.59   6.47 Granted - - - Exercised - - - Forfeited - - - Outstanding, March 31, 2025 1,721,761 $ 1.97 4.39 Outstanding, December 31, 2023 2,816,900 $ 2.03 4.08 Granted - - - Exercised - - - Forfeited - - - Outstanding, March 31, 2024 2,816,900 $ 2.03 4.08 Exercisable, December 31, 2024 1,721,761 $ 1.97 4.71 Exercisable, March 31, 2025 1,721,761 $ 1.97 4.39 Exercisable, December 31, 2023 2,720,221 $ 2.05 3.93 Exercisable, March 31, 2024 2,768,559 $ 2.04 3.76 As of March 31, 2025 and 2024, 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. Note 8. Income Tax The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes. ASC 740 requires companies to estimate the annual effective tax rate for current year ordinary income. In calculating the effective tax rate, permanent differences between financial reporting and taxable income are factored into the calculation, and temporary differences are not. The estimated annual effective tax rate represents the Company’s estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. 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 none and $ 800 for the three months ended March 31, 2025 and 2024, respectively. The Company is projecting a - 0.95 % effective tax rate for the year ending December 31, 2025, 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, 2024 was - 0.57 % , which was primarily the result of prior year true-ups and permanent adjustments. 14 Note 9. Related Party Transactions 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, the consideration for the membership interests included the notes in the amount of $ 286,643 to JBAH and $ 28,377,641 to Jorgan, which accrued interest of prime plus 3% on the outstanding balance of the notes. The principal amount of the Notes, together with any and all accrued and unpaid interest thereon, will be paid to on a monthly basis in an amount equal to the Monthly Free Cash Flow continuing thereafter on the twentieth (20 th ) calendar day of each calendar month thereafter. Monthly Free Cash Flow means cash proceeds received by SFD and WCCC from its operations minus any capital expenditures (including, but not limited to, maintenance capital expenditures and expenditures for personal protective equipment, additions to the land/current facilities and pipeline connections) and any payments on the lease obligations of SFD and WCCC. For the three months ended March 31, 2025 and 2024, we have made cash payments of $ 451,082 and $ 2,493 . 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. Under this agreement, WC Crude has the right, subject to the payment of service and maintenance fees, to store volumes of crude oil and other liquid hydrocarbons at a certain crude oil terminal operated by WCCC. WC Crude is required to pay $150,000 per month even if the storage space is not used. The agreement expires on December 31, 2031. We have received tank storage revenue of approximately $ 450,000 for the three months ended March 31, 2025 and 2024, respectively. 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. In the event that SFD makes more than $5.00 per barrel, SFD will pay WC Crude a profit-sharing payment in the amount equal to 10% of the excess price over $5.00 per barrel, which amount will be multiplied by the number of barrels associated with the sale. The Supply Agreement expires on December 31, 2031. For the three months ended March 31, 2025 and 2024, we made crude oil purchases from WC Crude of $ 3,594,162 and $ 11,620,447 and received deficiency payments of $478,918 and $547,839. In addition, SFD has a sales agreement to sell a natural gas liquid product and crude petroleum products to WC Crude. These sales agreements are cash net settled at market prices. We produced and sold crude and natural gas liquids to WC Crude in the amount of $ 1,585,303 and $ 2,657,906 for the three months ended March 31, 2025 and 2024. 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 had the right, but not the obligation to use Endeavor for consulting services. Since acquiring Endeavor this contract is eliminated upon consolidation for the three months ended March 31, 2025. For the three months ended March 31, 2024, Endeavor rendered services in the amount of $ 36,252 . 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, 2025 and 2024, the balance owed was $ 413,166 and $ 380,510 . Upon the Closing of our acquisition of the Endeavor Entities on October 1, 2024, we acquired Trucking Transportation Agreement & Addendum with White Claw Crude, LLC (“WC Crude”), who shares a beneficiary, James Ballengee, with Jorgan and JBAH. Under this agreement, WC Crude must, through its own operations or source for the Company, a minimum volume of 75,000 barrels of product per day for our trucking logistics services. The agreement expires on December 31, 2034. For the three months ended March 31, 2025, we realized related party trucking revenue related to this agreement of $ 1,934,106 . 15 Upon the Closing of our acquisition of the Endeavor Entities on October 1, 2024, we acquired a Station Throughput Agreement with Posse Wasson, LLC (Posse Monroe, LLC) (“Posse”), who shares a beneficiary, James Ballengee, with Jorgan and JBAH. Under this agreement, Possee must source for the Company, a minimum volume of 230,000 barrels per month through our storage facility at $0.275 per barrel, guaranteeing $759,000 of throughput revenue on an annual basis. The agreement expires on December 31, 2034. For the three months ended March 31, 2025, we realized revenue related to this agreement of $ 201,600 . Upon the Closing of our acquisition of the Endeavor Entities on October 1, 2024, we acquired a Station Throughput Agreement with WC Crude, who shares a beneficiary, James Ballengee, with Jorgan and JBAH. Under this agreement, WC Crude must source for the Company, a minimum volume of 200,000 barrels per month through our storage Omega Gathering Pipeline at $1.00 per barrel, guaranteeing $2,400,000 of throughput revenue on an annual basis. The agreement expires on December 31, 2034. For the three months ended March 31, 2025, we realized revenue related to this agreement of $ 378,535 . Note 10. Segments The Company has two reportable operating segments, which consist of trucking logistics services and terminaling and storage product and services, and uses segment income/(loss) from operations to assess performance against forecasted results and allocate resources to its segments. Segment income/(loss) from operations is determined on the same basis as consolidated income/(loss) from operations presented in the Company’s consolidated statements of operations. For information purposes, we have reported separately “Corporate and Other”, which is not determined to be an operating segment, but allows for analysis of non-operating entities and shared services and personnel that support both of the operating segments. Corporate and Other contains expenses for the corporate entity and non-operating entities, such as corporate overhead payroll expenses, stock-based compensation, corporate legal and audit expenses, impairment expense not related to operating segments, interest expense from loans at the corporate level, and amortization of intangible assets held at corporate and non-operating entities. 16 Our chief operating decision maker (CODM) is our Chief Executive Officer, James Ballengee. The CODM uses segment income/(loss) from operations before income taxes for purposes of allocating resources and evaluating financial performance predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis using the segment income/(loss) before taxes measure when making decisions about allocating capital and personnel to the segments. The CODM does not review assets in evaluating the results of the operating segments, and therefore, such information is not presented. Segment revenue, significant segment expenses, income/(loss) from operations, other income/(expense) and income/(loss) before income tax for the three months ended March 31, 2025 are as follows: Three Months Ended March 31, 2025 Schedule of segments Transportation Logistics Segment Terminaling and Storage Segment Corporate and other Total Consolidated Revenues $ 10,962,014 $ 21,826,502 - $ 32,788,516 Revenues- related party 2,514,241 2,037,534 - 4,551,775 Total revenues 13,476,255 23,864,036 - 37,340,291 Cost of revenues 9,766,845 22,815,012 - 32,581,857 Gross profit 3,709,410 1,049,024 - 4,758,434 Operating expenses: General and administrative 2,355,884 234,692 $ 2,778,737 5,369,313 Amortization and depreciation 4,574,072 844,826 412,704 5,831,602 Total operating expenses 6,929,956 1,079,518 3,191,441 11,200,915 Loss from operations ( 3,220,546 ) ( 30,494 ) ( 3,191,441 ) ( 6,442,481 ) Other income (expense): Unrealized gain (loss) on marketable securities - - 1,652,754 1,652,754 Loss on disposition of asset ( 1,597,913 ) - - ( 1,597,913 ) Interest income 23,175 - 2,307 25,482 Interest expense ( 939,429 ) - ( 191,648 ) ( 1,131,077 ) Interest expense- related parties - - ( 53,121 ) ( 53,121 ) Other income 12,540 - - 12,540 Total other income (expense) ( 2,501,627 ) - 1,410,292 ( 1,091,335 ) Loss before provision for income taxes ( 5,722,173 ) ( 30,494 ) ( 1,781,149 ) ( 7,533,816 ) Consolidated net loss ( 5,722,173 ) ( 30,494 ) ( 1,781,149 ) ( 7,533,816 ) Less: Net loss attributable to noncontrolling interests - - ( 6,518 ) ( 6,518 ) Net loss attributable to Vivakor, Inc. $ ( 5,722,173 ) $ ( 30,494 ) $ ( 1,774,631 ) $ ( 7,527,298 ) 17 Note 11. Subsequent Events The Company has evaluated subsequent events through the date the financial statements were available to issue. On April 9, 2025, a Side Letter (the “Cedarview Side Letter”) with Cedarview Capital Management LLC (“Cedarview”) went effective which amended the terms of that certain Loan and Security Agreement we issued to Cedarview dated October 31, 2024 (the “Cedarview Loan”). Under the terms of the Side Letter, we agreed to pay the remaining amounts we owe under the Cedarview Loan as follows: (i) $589,890.37 on or before April 9, 2025, (ii) payments of $150,000 on each of April 30, 2025 and May 31, 2025, and (iii) four monthly payments of $645,684.69 until the Cedarview Loan has been paid in full. In exchange for Cedarview agreeing to the extended repayment terms under the Side Letter for the Cedarview Loan we agreed we would (a) pay Cedarview 30% of any net amounts we receive from drawdowns from any equity lines of credit we do in the future as payments on the Cedarview Loan, (b) pay Cedarview 30% of any net proceeds received from the sale of any assets in the future as payments on the Cedarview Loan, and (c) issue Cedarview, or its assignees, 300,000 shares of our restricted common stock. We paid the $ 589,890 on April 9, 2025 and issued Cedarview, and its assignees, 300,000 shares of our restricted common stock on April 11, 2025. Between May 14, 2025 and May 19, 2025, we issued convertible promissory notes (the “Notes”), to several accredited investors (the “Holders”), in the aggregate principal amount of $575,000 in connection with a Securities Purchase Agreement entered into by and between the Company and the Holders (the “SPA”). Under the terms of the SPA and the Notes, we received $500,000, the Notes mature twelve months from the date of issuance, have a 15% original issuance discount, have a one-time ten percent (10%) interest charge applied at the issuance date, and are convertible at eighty percent (80%) of the lower of (a) the closing price of the Company’s common stock as traded on either the Nasdaq or the New York Stock Exchange or the NYSE Amex Exchange (as applicable) on the trading day immediately prior to the date a notice of conversion is submitted in writing to the Company under the Note (each a “Notice Date”), or (b) the average of the four lowest VWAPS over the twenty (20) trading days prior to the applicable Notice Date. In connection with the issuances of the Notes, we will issue the Holders 75,000 shares of our common stock as additional incentive to enter into the SPA and the Notes. On May 16, 2025, our subsidiary, Meridian Equipment Leasing, extended two lending agreements with Maxus Capital Gorup, LLC, which had an aggregate principal balance of $4.8 million and a maturity of May 2025 to November 2025. On May 20, 2025, we issued an aggregate of 1,764,964 shares of our restricted common stock for quarterly dividend to the holders of our Series A Preferred Stock. Of those shares, 1,384,311 were issued to Jorgan Development, LLC and 13,983 were issued to JBAH Holdings, LLC, both of which are controlled by James Ballengee, our Chief Executive Officer. On May 20, 2025 we issued 211,345 shares of common stock related to our consulting agreement with WSGS, LLC for management consulting services of $136,000 from January 2025 through April 2025. The principal of WSGS, LLC is also a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with on February 26, 2024, but has not closed, and E-Starts Money Co., a Delaware corporation, which is an investor in our common stock. The shares were issued as unrestricted shares under our Equity Incentive Plan registered under a Registration Statement on Form S-8. On May 20, 2025, we issued James Ballengee, our Chairman, Chief Executive Officer and principal shareholder, 168,731 shares of our common stock (net of tax withholdings) under the terms of the Ballengee employment agreement for his services rendered from January 28, 2025 to April 27, 2025. The shares were issued as unrestricted shares under our Equity Incentive Plan registered under a Registration Statement on Form S-8. Based on the Ballengee Employment Agreement, we owe Mr. Ballengee 688,891 shares of Common Stock for his employment period beginning October 28, 2024 through October 27, 2025, to be paid in three equal quarterly installments of 172,222 shares of Common Stock, and one installment of 172,225 shares (prior to tax withholdings). This summary is not a complete description of all of the terms of the SPA and the Notes and are qualified in their entirety by reference to the full text of the SPA and the Notes, forms of which are filed as Exhibits 10.1 and 10.2, respectively to our Current Report on Form 8-K filed with the Commission on May 20, 2025, which are incorporated by reference into this disclosure. 18