Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
VIVAKOR,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
2026
December 31,
2025
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
256,853
$
265,019
Cash - restricted
2,896
1,830,877
Accounts receivable, net of allowance for credit losses of $ 1,246,467 and $ 0 at June 30, 2026 and Dec 31, 2025, respectively
2,007,247
3,525,138
Accounts receivable - related party
10,680,036
1,439,228
Prepaid expenses
591,645
832,766
Marketable securities
583,406
247,913
Inventories
82,425
82,425
Total current assets
14,204,508
8,223,366
Other assets
821,264
491,221
Notes receivable
294,333
279,560
Property and equipment, net
55,984,734
58,297,200
Right of use assets - operating leases
191,769
494,755
Intellectual property, net
7,109,807
7,522,772
Customer relationships, net
35,806,846
38,184,057
Total assets
$
114,413,261
$
113,492,931
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses
$
16,211,378
$
13,976,431
Accounts payable and accrued expenses - related parties
1,528,694
1,832,625
Accrued compensation
485
41
Unearned revenue
9,107,297
9,107,297
Operating lease liabilities, current
191,769
272,469
Finance lease liabilities, current
9,549,265
9,101,852
Loans and notes payable, current
21,747,676
7,443,434
Loans and notes payable, current - related parties
2,568,617
3,616,401
Derivative liabilities
6,404,425
9,062,320
Other liabilities
5,201,776
7,103,109
Total current liabilities
72,511,382
61,515,979
Operating lease liabilities, long term
-
222,285
Loans and notes payable, long term
103,151
7,864,226
Loans and notes payable, long term - related parties
5,166,764
6,701,887
Total liabilities
77,781,297
76,304,377
Stockholders’ equity (deficit):
Preferred stock, $ 0.001 par value; 15,000,000 shares authorized, 96,731 outstanding as of June 30, 2026 and December 31, 2025
97
97
Common stock, $ 0.001 par value; 500,000,000 shares authorized; 511,000 and 100,000 were issued and outstanding as of June 30, 2026 and Dec 31, 2025, respectively
511
100
Additional paid-in capital
256,096,053
245,602,255
Treasury stock, at cost
( 20,000
)
( 20,000
)
Accumulated deficit
( 215,320,318
)
( 204,269,519
)
Total Vivakor, Inc. stockholders’ equity
40,756,343
41,312,933
Noncontrolling interest
( 4,124,379
)
( 4,124,379
)
Total stockholders’ equity
36,631,964
37,188,554
Total liabilities and stockholders’ equity
$
114,413,261
$
113,492,931
See accompanying notes to condensed consolidated financial statements
1
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Revenues
Revenues
$
26,514,153
$
20,998,423
$
40,607,537
$
53,786,939
Revenues - related party
5,603,053
8,101,023
10,967,779
12,652,798
Total revenues
32,117,206
29,099,446
51,575,316
66,439,737
Cost of revenues
25,482,907
24,519,777
39,217,787
57,101,634
Gross profit
6,634,299
4,579,669
12,357,529
9,338,103
Operating expenses:
Sales and marketing
157,500
720
157,500
720
General and administrative
3,767,311
4,484,746
9,364,350
9,854,023
Amortization and depreciation
2,551,186
6,870,950
5,102,643
12,702,552
Total operating expenses
6,475,997
11,356,416
14,624,493
22,557,295
Income (loss) from operations
158,302
( 6,776,747
)
( 2,266,964
)
( 13,219,192
)
Other income (expense):
Unrealized gain on marketable securities
346,871
( 1,731,160
)
335,493
( 78,406
)
Gain (loss) on disposition of assets
-
378,000
-
( 1,219,913
)
Gain on conversion of debt
781,398
-
595,543
-
Interest income
10,285
17,828
18,258
43,310
Interest expense
( 3,880,704
)
( 4,383,710
)
( 5,750,954
)
( 5,567,908
)
Interest expense - related parties
( 240,273
)
( 53,121
)
( 383,434
)
( 53,121
)
Other income
-
12,540
50,500
25,080
Total other income (expense)
( 2,982,423
)
( 5,759,623
)
( 5,134,594
)
( 6,850,958
)
Loss before provision for income taxes
( 2,824,121
)
( 12,536,370
)
( 7,401,558
)
( 20,070,150
)
Provision for income taxes
-
-
-
-
Consolidated net loss
( 2,824,121
)
( 12,536,370
)
( 7,401,558
)
( 20,070,150
)
Less: Net loss attributable to noncontrolling interests
-
-
-
( 6,518
)
Net loss attributable to Vivakor, Inc.
$
( 2,824,121
)
$
( 12,536,370
)
$
( 7,401,558
)
$
( 20,063,632
)
Series A Preferred Stockholder Dividends
1,450,966
1,452,624
3,649,241
3,045,037
Net loss to common shareholders
$
( 4,275,087
)
$
( 13,988,994 )
$
( 11,050,799
)
$
( 23,108,669
)
Basic and diluted net loss per share
$
( 13.35
)
$
( 0.30
)
$
( 64.28
)
$
( 0.52
)
Basic weighted average common shares outstanding
320,287
11,512
171,916
11,143
See accompanying notes to condensed consolidated financial statements
2
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
Series A
Preferred Stock
Common Stock
Additional
Paid-in
Treasury
Accumulated
Non-controlling
Total
Stockholders’
Shares
Amount
Shares
Amount
Capital
Stock
Deficit
Interest
Equity
January 1, 2025
107,789
$
108
10,427
$
10
$
208,209,236
$
( 20,000
)
$
( 88,951,426
)
$
( 4,119,284
)
$
115,118,644
Issuance
of common stock for cash, net of offering costs
-
-
13,316
13
9,656,972
-
-
-
9,656,985
Issuance of common stock for a reduction of liabilities
150
-
719,642
-
719,642
Issuance of common stock for legal settlement
2,853
3
1,987,058
1,987,061
Stock based compensation
586
1
1,510,004
-
1,510,005
Stock based compensation - consultant
2,456
2
1,907,999
-
1,908,001
Common stock issued - Series A Preferred Stock Dividends
1,509
1
4,866,249
( 4,866,250
)
-
Common stock distributable - Series A Preferred Stock Dividends
-
-
7,857
8
219,992
-
( 220,000
)
-
-
Shares issued with debt
-
-
437
1
1,449,223
-
-
-
1,449,224
Shares issued with debt conversion
61,063
61
16,563,588
-
16,563,649
Consideration received for divestiture
( 11,058
)
( 11
)
-
-
( 10,814,449
)
-
-
( 10,814,460
)
Excess of consideration for divestiture over net assets transferred
-
-
-
-
9,326,741
-
-
9,326,741
Net loss
-
-
-
-
-
-
( 110,231,843
)
( 5,095
)
( 110,236,938
)
January 1, 2026
96,731
$
97
100,655
$
100
$
245,602,255
$
( 20,000
)
$
( 204,269,519
)
$
( 4,124,379
)
$
37,188,554
Impact of stock split including issuances for fractional shares
-
-
851
1
( 1
)
-
-
-
-
Gain on forgiveness of convertible note payable to CEO
-
-
-
-
500,000
-
-
-
500,000
Stock based compensation
10,072
10
674,988
-
-
-
674,998
Stock
based compensation - consultant
26,744
27
702,488
-
-
-
702,515
Common stock issued - Series A Preferred Stock Dividends
4,610
5
1,714,954
-
( 1,714,959
)
-
-
Common stock distributable - Series A Preferred Stock Dividends
-
-
82,345
82
1,934,200
-
( 1,934,282
)
-
-
Shares issued with debt forbearance agreement
-
-
27,672
28
842,722
-
-
-
842,750
Shares issued with debt conversion
-
-
258,138
258
4,124,447
-
-
-
4,124,705
Net loss
-
-
-
-
-
-
( 7,401,558
)
-
( 7,401,558
)
June 30, 2026
96,731
$
97
511,087
$
511
$
256,096,053
$
( 20,000
)
$
( 215,320,318
)
$
( 4,124,379
)
$
36,631,964
See accompanying notes to condensed consolidated financial statements
3
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
2026
June 30,
2025
OPERATING ACTIVITIES:
Consolidated net loss
$
( 7,401,558
)
$
( 20,070,150
)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation
5,102,643
12,702,552
Stock-based compensation
674,988
690,350
Stock-based compensation - consultant
702,488
462,735
Unrealized (gain) loss on marketable securities
( 335,493
)
78,406
Loss on disposition of assets
-
1,219,913
Gain on conversion of debt
( 595,672
)
-
Noncash interest charges
3,635,842
2,805,481
Interest on notes receivable
( 14,773
)
( 46,771
)
Changes in operating assets and liabilities:
Accounts receivable
( 7,897,623
)
( 17,309,724
)
Prepaid expenses
241,121
( 1,583,825
)
Inventories
-
73,205
Right of use assets - operating leases
302,986
1,085,126
Other assets
169,957
( 155,984
)
Accounts payable and accrued expenses
2,053,562
14,297,080
Accrued compensation
444
-
Operating lease liabilities
( 302,985
)
( 1,228,730
)
Net cash provided by (used in) operating activities
( 3,664,073
)
( 6,980,336
)
INVESTING ACTIVITIES:
Proceeds from sale of property and equipment
-
1,860,000
Investment in joint venture
( 500,000
)
-
Net cash provided by (used in) investing activities
( 500,000
)
1,860,000
FINANCING ACTIVITIES:
Payment on financing lease liabilities
( 75,294
)
( 1,222,045
)
Proceeds from loans and notes payable
7,190,365
10,396,612
Proceeds from loans and notes payable - related party
-
1,911,432
Payment of notes payable
( 4,254,772
)
( 4,812,898
)
Payment of notes payable - related party
( 532,374
)
( 1,164,601
)
Net cash provided by (used in) financing activities
2,327,925
5,108,500
Net increase (decrease) in cash and cash equivalents
( 1,836,148
)
( 11,836
)
CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, BEGINNING OF PERIOD
2,095,896
3,676,992
CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, END OF PERIOD
$
259,749
$
3,665,156
SUPPLEMENTAL CASHFLOW INFORMATION:
Cash paid during the year for:
Interest
$
-
$
1,719,037
Noncash transactions:
Accounts payable on purchase of equipment
-
1,433,463
Notes payable settled against working capital items for netting arrangement
10,203,666
-
Series A preferred shareholder stock dividends
3,649,241
3,045,037
Common stock issued with debt
-
1,086,963
Common stock issued for a reduction in liabilities
-
754,642
Common stock issued on conversion of debt
4,124,705
-
See accompanying notes to condensed consolidated financial statements
4
VIVAKOR, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Description of Business
Vivakor, Inc. (collectively “we”, “us,” “our,” “Vivakor,” or the “Company”) is an integrated provider of midstream services and environmental solutions within the oil and gas industry. The Company owns and operates a diversified portfolio of midstream infrastructure assets located in several of the nation’s oil-producing basins, complemented by related environmental service offerings.
The Company conducts its operations through three primary business segments: transportation and logistics, terminaling and storage services, and supply and trading. The transportation and logistics segment includes crude oil gathering and transportation assets, including pipeline and trucking operations in the Permian and Anadarko Basins. The terminaling and storage services segment consists of crude oil terminal facilities located in Colorado City, Texas and Delhi, Louisiana. The supply and trading segment purchases and markets crude oil, condensate, and related hydrocarbon products.
The Company is also developing an environmental services business through the planned deployment of Remediation Processing Centers (“RPCs”), which are designed to recover hydrocarbons from contaminated soils and related waste streams. The RPC is under construction in Harris County, Texas.
On October 1, 2024, the Company acquired certain entities (the “Endeavor Entities”), expanding its midstream operations. During 2025, the Company completed the sale of certain non-core assets acquired in this transaction as part of a strategic review. On July 30, 2025, the Company sold certain non-core business units of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, both subsidiaries included with the Endeavor Entities, in order to streamline operations and focus on core midstream transportation, terminaling, and environmental processing activities. See Note 4 – Business Combination and Divestiture of Wholly Owned Subsidiaries for additional information.
Note 2. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements have been 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”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the interim periods presented.
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full fiscal year.
5
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.
Change in Estimated Useful Lives
During the six months ended June 30, 2026, the Company reassessed the estimated useful lives of certain property and equipment based on operational experience, expected usage, and updated maintenance and replacement assumptions. As a result, the Company revised the estimated useful lives of certain assets on a prospective basis effective January 1, 2026.
The change in estimate was accounted for prospectively in accordance with ASC 250, Accounting Changes and Error Corrections. The effect of the change was to decrease depreciation expense by approximately $ 0 and $ 405,000 for the three and six months ended June 30, 2026, respectively.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from the sale of crude oil and related petroleum products is recognized at a point in time when control transfers to the customer, generally upon delivery. Revenue from terminaling, storage, pipeline throughput, and transportation services is recognized over time as services are performed.
Segment Reporting
The Company operates through three reportable business segments: (i) Transportation and Logistics, (ii) Terminaling and Storage, and (iii) Supply and Trading.
Related Party Revenues
Revenue from related parties was $ 5,603,053 and $ 10,967,779 for the three and six months ended June 30, 2026, respectively. Revenue from related parties was $ 8,101,023 and $ 12,652,798 for the three and six months ended June 30, 2025, respectively.
The Company generates revenue from related parties through the sale of crude oil and related products, as well as the provision of terminaling, storage, pipeline throughput, and transportation logistics services under long-term contracts.
The Company evaluates collectability of related party receivables in a manner consistent with other customers.
Major Customers and Concentration of Credit Risk
During the three and six months ended June 30, 2026, three customers, including one related party, accounted for approximately 94.8 and 92.4 % , respectively, of the Company’s revenues. As of June 30, 2026, no significant accounts receivable balances were outstanding from these customers.
During the three and six months ended June 30, 2025, one customer, a related party, accounted for approximately 17 % and 6 % , respectively, of the Company’s revenues. As of June 30, 2025, this customer represented approximately 15 % of the Company’s accounts receivable balance.
6
Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
All share and per share amounts have been retroactively adjusted to reflect the reverse stock splits effected in March 2026 and July 2026.
Potentially dilutive securities are excluded from the computation of diluted net income (loss) per share when their effect would be antidilutive. Potentially dilutive securities include convertible notes, warrants, and stock options.
Note 3. Going Concern & Liquidity
The Company has historically incurred
net losses and experienced negative cash flows from operations and, as of June 30, 2026, had an accumulated deficit of approximately
$215 ( 215,320,318 ) million. As of June 30, 2026, the Company had a working capital deficit of approximately $ 58 million and cash and
cash equivalents of $ 259,416 , of which $ 2,896
was restricted. In addition, the Company had approximately $ 24.3
million of debt obligations due within one year of the issuance of these condensed consolidated financial statements. The Company is
also obligated under finance lease liabilities of approximately $9.5 9,549,265
million and has current derivative liabilities of approximately $ 6.4
million, which may require settlement in cash or equity and could place additional demands on liquidity. These conditions raise
substantial doubt about the Company’s ability to continue as a going concern.
During the six months ended June 30, 2026, the Company continued executing its strategic plan focused on optimizing its midstream transportation, terminaling, and environmental processing operations, including the integration and operation of the Endeavor Entities acquired in the fourth quarter of 2024. The Company has historically financed its operations through a combination of operating cash flows, debt financings, and private and public equity offerings. The Company also entered into a financing arrangement with two institutional investors, with RBW Capital Partners LLC acting as placement agent, intended to support working capital and ongoing operations.
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 4. Business Combination, Divestiture of Wholly Owned Subsidiaries and Joint Venture
On October 1, 2024, the Company acquired all of the issued and outstanding membership interests of Endeavor Crude, LLC, Equipment Transport, LLC, Meridian Equipment Leasing, LLC, and Silver Fuels Processing, LLC (collectively, the “Endeavor Entities”).
On July 30, 2025, the Company completed the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC (together, the “Divested Entities”), two indirectly wholly owned subsidiaries acquired as part of the Endeavor Entities, pursuant to a Membership Interest Purchase Agreement entered into with Jorgan Development, LLC, an entity controlled by James Ballengee, the Company’s Chief Executive Officer and Chairman.
Effective June 2, 2026, the Company entered into a joint venture agreement with Monarch R&P Management LLC for a 50% interest in Monarch Remediation & Processing LLC (“Monarch”) for future operations associated with operating a wash plant and remediation processing centers. As of June 30, 2026, the Company has contributed $ 500,000 which is included in Other Assets in the accompanying consolidated balance sheet.
7
Note 5. Accounts Receivable
Accounts receivable primarily consist of trade receivables related to crude oil sales and transportation services and are recorded net of an allowance for expected credit losses. The Company evaluates the collectability of accounts receivable on an ongoing basis based on historical experience, customer creditworthiness, and current economic conditions. The allowance for expected credit losses is reviewed on a periodic basis, and balances are written off when deemed uncollectible.
During the six months ended June 30, 2026, the Company recorded an allowance for expected credit losses related to certain customer receivable balances based on management’s assessment of collectability and current economic conditions.
Accounts receivable consisted of the following:
Schedule of accounts receivable
June 30,
2026
December 31,
2025
Trade accounts receivable
$
3,253,714
$
3,525,138
Less: allowance for credit losses
( 1,246,467
)
-
Accounts receivable, net
$
2,007,247
$
3,525,138
Related party receivables
$
10,680,036
$
1,439,228
The balance of related-party receivables is due from entities affiliated with the Company’s Chief Executive Officer. During the three and six months ended June 30, 2026, amounts due under related-party commercial agreements were offset against amounts payable to Jorgan Development, LLC pursuant to existing offset arrangements between the parties. As a result of such offsets and related activity, the Company’s net position with the affiliated entities transitioned from a payable position to a receivable position during the six months ended June 30, 2026. As of June 30, 2026, related-party receivables totaled approximately $ 10.7 million, compared with approximately $ 1.4 million as of December 31, 2025.
Note 6. Marketable Securities
The Company holds 200,000 shares of common stock of Adapti, Inc. (“Adapti”), an entity affiliated with the Company’s Chief Executive Officer. The investment is classified as a marketable equity security and is measured at fair value using quoted market prices, with changes in fair value recognized in earnings.
The carrying value of marketable securities consisted of the following:
Schedule of marketable securities
June 30,
2026
December 31,
2025
Investment in Adapti
$
968,812
$
968,812
Unrealized loss
( 385,406
)
( 720,899
)
Marketable Securities, net
$
583,406
$
247,913
The Company recognized unrealized gains related to marketable securities of $ 346,871 and $ 335,493 during the three and six months ended June 30, 2026, respectively. The Company recognized unrealized losses related to marketable securities of $ 1,731,160 and $ 78,406 during the three and six months ended June 30, 2025, respectively.
8
Note 7. Property and Equipment
Property and equipment consisted of the following:
Schedule of property and equipment, net
June 30,
2026
December 31,
2025
Vehicles and trailers
$
1,655,550
$
1,655,548
Equipment
476,756
476,756
Land
527,000
527,000
Crude & NGL Terminal and Related Equipment
930,460
930,460
Crude Oil Transfer Stations
5,024,220
5,024,220
Pipeline and Related Facilities
43,462,544
43,462,544
Tank Expansion
1,627,385
-
Construction in process
12,368,718
13,996,104
Less: Accumulated depreciation
( 10,087,899
)
( 7,775,432
)
$
55,984,734
$
58,297,200
Depreciation expense for the three and six months ended June 30, 2026 was $ 1,156,098 and $ 2,312,467 , respectively. Depreciation expense for the three and six months ended June 30, 2025 was $ 795,083 and $ 4,322,728 , respectively.
The decrease in depreciation expense during the six-month 2026 period was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, as well as revisions to the estimated useful lives of certain property and equipment based on operational experience and expected usage. The change in estimate was accounted for prospectively and resulted in a decrease in depreciation expense of approximately $ 405,000 during the 2026 period.
Construction in process primarily relates to the Company’s remediation processing systems, wash plant facilities, and terminal expansion projects.
Note 8. Intangible Assets
Intangible assets consisted of the following:
Schedule of intangible assets
June 30,
2026
December 31,
2025
Intangible assets, gross
$
16,498,587
$
16,498,587
Accumulated amortization
( 9,388,780
)
( 8,975,815
)
Intangible assets, net
$
7,109,807
$
7,522,772
9
Customer relationship intangible assets consisted of the following:
Customer relationships, gross
$
48,093,160
$
48,093,160
Accumulated amortization
( 12,286,314
)
( 9,909,103
)
Customer relationships, net
$
35,806,846
$
38,184,057
Amortization expense was $ 1,394,817 and $ 2,790,176 for the three and six months ended June 30, 2026, respectively. Amortization expense was $ 6,075,867 and $ 8,379,824 for the three and six months ended June 30, 2025, respectively.
The Company evaluates long-lived assets and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. No impairment charges related to intangible assets were recorded during the three and six months ended June 30, 2026.
Goodwill was fully impaired during the year ended December 31, 2025. Accordingly, the Company had no goodwill recorded as of June 30, 2026 or December 31, 2025.
Note 9. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
Schedule of accounts payable and accrued expenses
June 30,
2026
December 31,
2025
Accounts payable
$
13,582,511
$
12,425,200
Accrued interest (various notes and loans payable)
1,599,021
713,754
Accrued tax penalties and interest
1,029,846
837,477
Accounts payable and accrued expenses
$
16,211,378
$
13,976,431
Related-party accounts payable and accrued expenses consisted of the following:
Schedule of accounts payable and accrued expenses related parties
June 30,
2026
December 31,
2025
Accounts payable - related parties
$
-
$
1,593,993
Accrued interest (notes payable) - related parties
1,528,694
238,632
Accounts payable and accrued expenses - related parties
$
1,528,694
$
1,832,625
Accounts payable primarily consist of trade payables and operating accruals incurred in the ordinary course of business.
10
Note 10. Unearned Revenue
As of June 30, 2026 and December 31, 2025, the Company had approximately $ 9.1 million of unearned revenue related to an agreement to manufacture remediation processing centers (“RPCs”). The balance originated in connection with the deconsolidation of Viva Wealth Fund I, LLC during 2023.
Note 11. Loans and Notes Payable
Third party debt:
Schedule of loans and notes payable
June 30,
2026
December 31,
2025
Various promissory notes and convertible notes
$
13,557
$
64,517
Blue Ridge Bank
410,200
410,200
Small Business Administration
358,827
358,827
Al Dali Intl for Gen. Trading & Cont. Co.
248,877
248,877
RSF, LLC
500,000
500,000
Cedarview Opportunities Master Fund LP
5,025,679
3,701,402
Curve Capital, LLC
549,463
549,463
ClearThink Capital Partners, LLC
771,651
588,015
ClearThink Capital Partners, LLC (RBW)
6,438,909
1,619,159
Agile Capital Funding, LLC
1,776,300
1,713,300
JJ Astor
5,757,365
5,553,900
Total notes payable
$
21,850,828
$
15,307,660
Loans and notes payable, current
$
21,747,676
$
7,443,434
Loans and notes payable, long term
$
103,152
$
7,864,226
Related party debt:
Schedule of loans and notes payable related parties
June 30,
2026
December 31,
2025
Jorgan Development, LLC
$
-
$
1,137,563
Matt Nicosia
100,740
-
James Ballengee Companies
1,174,178
1,981,730
Meridian Equipment Leasing, LLC
5,945,952
6,701,887
Triple T Trading Company LLC
514,510
497,109
Total notes payable - related parties
$
7,735,380
$
10,318,288
Loans and notes payable, current - related parties
$
2,568,616
$
3,616,401
Loans and notes payable, long term - related parties
$
5,166,764
$
6,701,887
11
Maturity Table
Schedule of maturities of loans and notes payable
2026
$
18,563,246
$
11,501,679
2027
8,096,884
9,345,236
2028
1,781,803
1,781,803
2029
2,657,351
3,413,285
2030
25,788
25,788
Thereafter
-
Total long-term debt
31,125,071
26,067,791
Less: unamortized OID:
( 1,538,863
)
( 441,843
)
Net debt
$
29,586,208
$
25,625,948
ClearThink Partners, LLC — On January 9, 2026, the Company issued a promissory note to ClearThink Capital Partners LLC in the principal amount of $ 322,000 and received proceeds of $ 280,000 after an original issue discount of $ 42,000 . The note matures twelve months from issuance and includes a one-time interest charge of 15 % . During the six months ended June 30, 2026, the lender converted an aggregate of $ 175,200 of outstanding principal under the convertible debt into 30,000 shares of the Company’s common stock, resulting in a non-cash loss on conversion of approximately $ 175,200 . As of June 30, 2026, the outstanding balance of the note was $ 299,792 , net of unamortized discount of $ 22,208 .
ClearThink Capital Partners, LLC/RBW Investors — During 2025, the Company entered into multiple twelve-month convertible promissory notes with investors introduced to us by ClearThink Capital Partners, LLC and RBW totaling approximately $ 5.1 million in principal amount. The notes included original issue discounts, one time interest charges, and conversion features. During 2025, holders converted an aggregate of approximately $ 3.2 million of outstanding principal into shares of the Company’s common stock. During the six months ended June 30, 2026, the lender converted an aggregate of $ 1,837,152 of outstanding principal under the convertible debt into 225,161 shares of the Company’s common stock, resulting in a non-cash loss on conversion of approximately $ 1.8 million. On January 30, 2026, the Company entered into Forbearance and Note Amendment Agreements with the holders of the notes. Pursuant to the amended agreements, the maturity dates of the notes were extended to January 31, 2027 and certain repayment terms were revised. In connection with the amendments, the Company agreed to issue an aggregate of 13,922 shares of restricted common stock to the noteholders. The amended agreements provide for installment payments through January 31, 2027 and restrict conversions under the notes. As of June 30, 2026, the outstanding balance of the notes was $ 455,563 .
On May 8, 2026, the Company closed the initial tranche of a securities purchase agreement with certain institutional investors pursuant to which the Company issued promissory notes with aggregate gross proceeds of up to $12.0 million, to be funded in two tranches (the “May 2026 Financing Transaction”). The initial closing provided gross proceeds of $6.0 million before placement agent fees and offering expenses. If fully funded, the notes will have an aggregate principal amount of $ 15.0 million, inclusive of original issue discount, and are convertible into shares of the Company’s common stock subject to certain pricing terms and ownership limitations.
William Tuorto — During the six months ending June 30, 2026, the Company entered into a short-term funding arrangement totaling $ 387,020 which was repaid in May 2026.
JJ Astor & Co . — During 2025, the Company entered into multiple financing and forbearance arrangements with J.J. Astor & Co. related to secured promissory notes issued by the Company. As of December 31, 2025, the Second Note remained outstanding. On February 27, 2026, the Company entered into additional amendment and forbearance agreements with J.J. Astor & Co., which modified repayment terms, extended certain maturity dates, and provided for additional financing. The Company issued an additional secured promissory note in the principal amount of $ 993,750 and received net proceeds of approximately $ 750,000 prior to fees and expenses. On May 6, 2026, the Company entered into an additional forbearance and note payment amendment agreement with J.J. Astor & Co. related to the Company’s outstanding secured promissory notes they hold. Pursuant to the agreement, the parties revised certain repayment terms associated with the Company’s May 2026 Financing Transaction and extended certain repayment obligations through January 2027. During the six months ended June 30, 2026, the lender converted an aggregate of $ 50,000 of outstanding principal under the convertible debt into 2,976 shares of the Company’s common stock, resulting in a non-cash loss on conversion of approximately $ 50,000 . In addition, pursuant to the agreement, the Company made a $ 1.5 million principal payment in May 2026. As of June 30, 2026, the aggregate outstanding balance related to the J.J. Astor financing arrangements was $ 5,757,365 .
12
Jorgan Development, LLC — During the three and six months ended June 30, 2026, $- 0 - and $ 1.1 million, respectively, outstanding under the Jorgan Development, LLC related-party note payable was offset against amounts due from affiliated entities under related-party commercial agreements pursuant to existing offset arrangements between the parties. As a result, no balance remained outstanding under the Jorgan Development, LLC note as of June 30, 2026.
As of June 30, 2026, the Company had outstanding secured notes payable to Cedarview Opportunities Master Fund LP of $ 5,025,679 . The Company entered into a forbearance arrangement with Cedarview related to existing payment defaults and ongoing repayment discussions. During the three months ended June 30, 2026, the parties entered into an additional forbearance agreement extending the forbearance period through October 31, 2026, subject to certain repayment and financing conditions.
Note 12. Other Current Liabilities
Certain conversion features embedded within the Company’s convertible debt instruments contain variable settlement provisions and are accounted for as derivative liabilities in accordance with ASC 815, Derivatives and Hedging. As of June 30, 2026 and December 31, 2025, the Company had outstanding balances of $ 6.4 million and $ 9.1 million, respectively, related to derivative liabilities. During the six months ended June 30, 2026, changes in the derivative liabilities, including amounts associated with conversions of the underlying convertible debt, resulted in a net gain on conversion of debt of approximately $ 0.6 million, which is included in other income (expense) in the accompanying condensed consolidated statements of operations.
As of June 30, 2026 and December 31, 2025, the Company had outstanding balances of $ 5.2 and $ 7.1 million, respectively, under a line of credit arrangement with B1 Bank related to accounts receivable factoring. During the six months ended June 30, 2026, B1 Bank applied approximately $ 1.8 million of restricted cash maintained by the Company against the outstanding balance under the facility. The facility remained matured as of June 30, 2026.
Note 13. Commitments and Contingencies
Finance Leases
The Company has finance lease arrangements related primarily to storage, terminaling, and transportation equipment. Certain finance lease obligations are subject to forbearance arrangements and revised payment terms.
As of June 30, 2026 and December 31, 2025, respectively, finance lease liabilities consisted of the following:
Schedule of financing lease liability
Description
June 30,
2026
December 31,
2025
Principal portion of finance lease obligations
$
8,711,783
$
8,711,784
Accrued interest
$
837,482
$
390,068
Total finance lease liabilities (current)
$
9,549,265
$
9,101,852
Operating Leases
The Company leases office space, land, trucking yards, and equipment under non-cancelable operating lease agreements with remaining lease terms ranging from less than one year to approximately two years. The right-of-use assets for operating leases as of June 30, 2026 and December 31, 2025 were $ 191,769 and $ 494,755 , respectively. Lease expense for the three and six months ended June 30, 2026 totaled $ 98,129 and $ 190,259 , respectively. Lease expense for the three and six months ended June 30, 2025 totaled $ 78,876 and $ 157,672 , respectively.
13
Operating lease liabilities consisted of the following:
Schedule of lessee operating lease liability
2026
119,008
2027
141,509
2028
-
2029
-
Thereafter
-
Total undiscounted lease payments
260,517
Less: Imputed interest
( 68,748
)
Present value of lease payments
191,769
Operating lease liabilities, current
191,769
Operating lease liabilities, long-term
0
Operating lease liability
191,769
Weighted-average remaining lease term (mo.)
9.24
Weighted-average discount rate
4.58
%
Note 14. Stockholders’ Equity
Series A Preferred Stock
The Company’s Series A Preferred Stock has a stated value of $ 1,000 per share, carries a cumulative dividend of 6 % per annum based on the stated value, is convertible into shares of the Company’s common stock at the Company’s request, and votes on an “as-converted” basis, subject to the terms of the Certificate of Designation. As of June 30, 2026 and December 31, 2025, 96,731 shares of Series A Preferred Stock were issued and outstanding.
Pursuant to the Debt Satisfaction and Preferred Stock Amendment Agreement dated November 25, 2025, dividends on the Company’s Series A Convertible Preferred Stock were suspended from April 30, 2026 through April 29, 2027 in connection with amendments to the preferred stock terms and the satisfaction of certain outstanding convertible indebtedness. Subsequent to June 30, 2026, on July 7, 2026, the Company amended the agreement to reinstate the 6% Series A Preferred Stock dividend through April 29, 2027 in exchange for the extinguishment of $ 500,000 of indebtedness owed to Ballengee Holdings, LLC.
Common Stock
The Company has authorized 500,000,000 shares of common stock, par value $ 0.001 per share.
All share and per share amounts presented in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the Company’s 1-for-200 reverse stock split effected during March 2026 and the Company’s 1-for-20 reverse stock split effected during July 2026.
14
Note 15. Share-Based Compensation and Warrants
The Company maintains the 2023 Equity and Incentive Plan (the “2023 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, restricted stock units, and other equity-based awards to employees, directors, consultants, and service providers.
During the three and six months ended June 30, 2026, the Company issued an aggregate of 34,990 and 36,816 , respectively, shares of common stock as stock-based compensation to employees, directors and consultants. During the three and six months ended June 30, 2025, the Company issued an aggregate of 95 and 345 , respectively, shares of common stock as stock-based compensation to employees, directors and consultants. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $ 337,500 and $ 675,000 , respectively. For the three and six months ended June 30, 2026, the Company recognized consulting stock-based compensation expense of $ 702,515 and $ 702,515 , respectively. For the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $ 188,927 and $ 690,350 , respectively. For the three and six months ended June 30, 2025, the Company recognized consulting stock-based compensation expense of $ 162,735 and $ 462,735 , respectively.
There were no other options or awards granted during the three and six months ended June 30, 2026. The following table summarizes all stock option activity of the Company for the six months ended June 30, 2026 and 2025:
Schedule of warrant assumptions
Number
of Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (Years)
Outstanding, December 31, 2025
355
$
7,440
2.59
Granted
-
-
-
Exercised
-
-
-
Forfeited
-
-
-
Outstanding, June 30, 2026
355
$
7,440
2.59
Outstanding, December 31, 2024
430
$
7,880
4.71
Granted
-
-
-
Exercised
-
-
-
Forfeited
-
0
-
Outstanding, June 30, 2025
430
$
7,880
4.07
The Company maintains the 2025 Equity and Incentive Plan (the “2025 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, restricted stock units, and other equity-based awards to employees, directors, consultants, and service providers. No awards have been granted under the 2025 Plan.
15
Note 16. Segments
The Company conducts its operations through three reportable segments: (i) transportation and logistics services, (ii) terminaling and storage services, and (iii) supply and trading. The Company’s Chief Executive Officer, who serves as chief operating decision maker (“CODM”), evaluates segment performance based on gross profit.
Three Months Ended June 30, 2026:
Schedule of segment reporting information, by segment
Transportation
and Logistics
Segment
Terminaling
and Storage
Segment
Supply
and Trading
Segment
Total
Consolidated
Revenues
$
19,213
$
7,399
$
26,487,540
$
26,514,153
Revenues - related party
3,730,702
1,872,351
-
5,603,053
Total revenues
3,749,916
1,879,750
26,487,540
32,117,206
Cost of revenues
-
53,929
25,428,979
25,482,907
Gross profit
$
3,749,916
$
1,825,821
$
1,058,560
$
6,634,299
Six Months Ended June 30, 2026:
Transportation
and Logistics
Segment
Terminaling
and Storage
Segment
Supply
and Trading
Segment
Total
Consolidated
Revenues
$
421,942
$
147,931
$
40,037,664
$
40,607,537
Revenues -
related party
7,363,210
3,604,569
-
10,967,779
Total revenues
7,785,152
3,752,500
40,037,664
51,575,316
Cost of revenues
-
109,247
39,108,541
39,217,787
Gross profit
$
7,785,152
$
3,643,253
$
929,123
$
12,357,529
Three Months Ended June 30, 2025:
Transportation
and Logistics
Segment
Terminaling
and Storage
Segment
Supply
and Trading
Segment
Total
Consolidated
Revenues
$
7,601,942
$
4,244,457
$
9,152,025
$
20,998,423
Revenues - related party
2,854,331
5,246,692
-
8,101,023
Total revenues
10,456,273
9,491,149
9,152,025
29,099,446
Cost of revenues
7,363,645
8,026,546
9,129,586
24,519,777
Gross profit
$
3,092,628
$
1,464,602
$
22,439
$
4,579,669
Six Months Ended June 30, 2025:
Transportation
and Logistics
Segment
Terminaling
and Storage
Segment
Supply
and Trading
Segment
Total
Consolidated
Revenues
$
18,563,956
$
10,414,481
$
24,808,502
$
53,786,939
Revenues -
related party
5,368,572
7,284,226
-
12,652,798
Total revenues
23,932,528
17,698,707
24,808,502
66,439,737
Cost of revenues
17,130,490
15,940,743
24,030,401
57,101,634
Gross profit
$
6,802,038
$
1,757,964
$
778,101
$
9,338,103
16
Note 17. 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 $ 0
for the three and six months ended June 30, 2026 and 2025, respectively. The Company is projecting a (-0.10%) 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.
Note 18. Related Party Transactions
The Company engages in transactions with
entities affiliated with James Ballengee, the Company’s Chief Executive Officer and principal shareholder, in the ordinary course
of business. The Company is party to various commercial agreements with White Claw Crude, LLC (“WC Crude”), Jorgan Development,
LLC (“Jorgan”), and other affiliated entities, including storage, throughput, transportation, and supply agreements.
Revenue from related parties was $ 5.6 million and $ 11.0 million for the three and six months ended June 30, 2026, respectively, compared with $ 8.1 million and $ 12.7 million for the three and six months ended June 30, 2025, respectively.
As of June 30, 2026 and December 31,
2025, accounts receivable from related parties were approximately $10.7 2,007,247 million and $1.4 3,525,138 million, respectively.
During the six months ended June 30, 2026, amounts due under related-party commercial agreements were offset against amounts payable
to Jorgan pursuant to existing offset arrangements between the parties.
The Company also has certain debt and lease arrangements with entities affiliated with its Chief Executive Officer, as further described elsewhere in these condensed consolidated financial statements.
Note
19. Subsequent Events
The Company has evaluated subsequent events through the date the financial statements were available to issue.
On July 7, 2026, the Company agreed to issue an aggregate of 3,740,586 shares of restricted common stock for dividends owed on our Series A Preferred Stock for April 30, 2026, July 31, 2026, and October 31, 2026 to the holders of the Series A Preferred Stock. Of those shares, an aggregate of 1,445,349 shares were issued to Jorgan Development, LLC and JBAH Holdings, LLC, entities controlled by James Ballengee, our Chief Executive Officer, or their assignees.
On July 10, 2026, the Company filed an amendment to its Articles of Incorporation to effect a 1-for-20 reverse stock split of its common stock, which became effective with Nasdaq at the opening of trading on July 17, 2026. The reverse stock split was implemented to support the Company’s continued listing on the Nasdaq Capital Market.
17
On July 16, 2026, the Company closed the second tranche of the May 2026 Financing Transaction, receiving $ 6,000,000 . Having received both tranches under the May 2026 Financing Transaction the full amount of the $ 15 million convertible promissory note issued under the transaction is outstanding. Subsequent to June 30, 2026, the investors converted $ 2,956,845 of the amount due under the promissory note into 2,027,026 shares of the Company’s common stock.
On July 21, 2026 and August 3, 2026 the Company received a Notice of Conversion from ClearThink Capital Partners converting an aggregate of $ 490,861 of the principal amount and interest due under its promissory note into 543,513 shares of the Company’s common stock. With these conversions all amounts due under this promissory have been paid.
Between July 21, 2026 and August 10, 2026, the Company received Notices of Conversion from several of the ClearThink Capital Partners, LLC/RBW transaction investors converting $ 541,080 of the amounts due under the promissory note into 583,657 shares of the Company’s common stock.
Between July 21, 2026 and August 10, 2026, the Company received Notices of Conversion from J.J. Astor converting an aggregate of $ 3,151,842 .24 of the Principal Amount of J.J. Astor’s Second Note into an aggregate of 3,413,592 shares of the Company’s common stock.
18
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.