UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
or
For the Transition Period from _________ to _________
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or other Jurisdiction of Incorporation or Organization) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of exchange on which registered | ||
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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| ☒ | Smaller reporting company | ||
| Emerging growth company |
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VIVAKOR, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VIVAKOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 30, 2025 |
December 31, 2024 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Cash- restricted | ||||||||
| Accounts receivable, net of allowance for credit losses of $ |
||||||||
| Accounts receivable- related party | ||||||||
| Prepaid expenses | ||||||||
| Marketable securities | ||||||||
| Inventories | ||||||||
| Total current assets | ||||||||
| Other assets | ||||||||
| Notes receivable | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets- operating leases | ||||||||
| Intellectual property, net | ||||||||
| Customer relationships, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable and accrued expenses- related parties | ||||||||
| Accrued compensation | ||||||||
| Unearned revenue | ||||||||
| Operating lease liabilities, current | ||||||||
| Finance lease liabilities, current | ||||||||
| Loans and notes payable, current | ||||||||
| Loans and notes payable, current- related parties | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, long term | ||||||||
| Finance lease liabilities, long term | ||||||||
| Loans and notes payable, long term | ||||||||
| Deferred tax liability | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $ par value; shares authorized, outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value; shares authorized; and were issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost | ( |
) | ( |
) | ||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Vivakor, Inc. stockholders’ equity (deficit) | ||||||||
| Noncontrolling interest | ( |
) | ( |
) | ||||
| Total stockholders’ equity (deficit) | ||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
1
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Six months ended June 30, |
Three months ended June 30, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | ||||||||||||||||
| Terminaling and storage | $ | $ | $ | $ | ||||||||||||
| Terminaling and storage- related party | ||||||||||||||||
| Transportation logistics | ||||||||||||||||
| Transportation logistics- related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized loss on marketable securities | ( |
) | ( |
) | ( |
) | ||||||||||
| Gain (loss) on disposition of assets | ( |
) | ||||||||||||||
| Gain on deconsolidation of subsidiary | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Interest expense- related parties | ( |
) | ( |
) | ||||||||||||
| Other income | ||||||||||||||||
| Total other income (expense) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Loss before provision for income taxes | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Provision for income taxes | ( |
) | ( |
) | ||||||||||||
| Consolidated net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Less: Net loss attributable to noncontrolling interests | ( |
) | ( |
) | ( |
) | ||||||||||
| Net loss attributable to Vivakor, Inc. | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Series A Preferred Stockholder Dividends | ||||||||||||||||
| Net loss to common shareholders | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Basic and diluted net loss per share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Basic weighted average common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these 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, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
| Issuance of common stock for services | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for a reduction of liabilities | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock on conversion of debt | - | |||||||||||||||||||||||||||||||||||
| Issuance of warrants for services | - | - | ||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||
| Stock based compensation- Consultant | - | |||||||||||||||||||||||||||||||||||
| Series A Preferred Stock issued as part consideration for the purchase of the Endeavor Entities | - | |||||||||||||||||||||||||||||||||||
| Common stock issued as part consideration for the purchase of the Endeavor Entities | - | |||||||||||||||||||||||||||||||||||
| Common stock distributable- Series A Preferred Stock Dividends | - | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||
| Issuance of common stock for a reduction of liabilities | - | |||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||
| Stock based compensation- consultant | - | |||||||||||||||||||||||||||||||||||
| Common stock distributable- Series A Preferred Stock Dividends | - | ( |
) | |||||||||||||||||||||||||||||||||
| Shares issued with debt | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
3
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, |
||||||||
| 2025 | 2024 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Consolidated net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation- consultant | ||||||||
| Unrealized (gain) loss- marketable securities | ||||||||
| Loss on disposition of assets | ||||||||
| Gain on deconsolidation of subsidiary | ( |
) | ||||||
| Deferred income taxes | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ( |
) | ||||
| Prepaid expenses | ( |
) | ( |
) | ||||
| Inventory | ( |
) | ||||||
| Other assets | ( |
) | ( |
) | ||||
| Right of use assets- finance leases | ||||||||
| Right of use assets- operating leases | ||||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Accounts payable and accrued expenses | ||||||||
| Interest on notes receivable | ( |
) | ( |
) | ||||
| Interest on notes payable | ||||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of property and equipment | ||||||||
| Purchase of equipment | ( |
) | ||||||
| Net cash provided by (used in) investing activities | ( |
) | ||||||
| FINANCING ACTIVITIES: | ||||||||
| Payment on financing lease liabilities | ( |
) | ( |
) | ||||
| Proceeds from loans and notes payable | ||||||||
| Proceeds from loans and notes payable- related party | ||||||||
| Payment of notes payable | ( |
) | ( |
|||||
| Payment of notes payable- related party | ( |
) | ( |
) | ||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash and cash equivalents | ( |
( |
||||||
| CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASHFLOW INFORMATION: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $ | $ | ||||||
| Noncash transactions: | ||||||||
| Accounts payable on purchase of equipment | $ | $ | ||||||
| Capitalized interest on construction in process | $ | $ | ||||||
| Common stock issued with debt | $ | $ | |
|||||
| Common stock issued for a reduction in liabilities | $ | |
$ | |||||
| Series A preferred shareholder stock dividends | $ | $ | ||||||
| Common stock issued for services | $ | $ | ||||||
| Stock warrants issued for services | $ | $ | ||||||
| Common stock issued on conversion of debt | $ | $ | ||||||
The accompanying notes are an integral part of these 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 and six months ended June 30, 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 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 $
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 six months ended June 30, 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 six months ended June 30, 2025.
6
Revenue Recognition
For the six months ended June 30, 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 June 30, 2025 and 2024, disaggregated revenue by customer type was as follows: $
Related Party Revenues
Our revenue from related parties for the three months and six months ended June 30, 2025 was $
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
For the three months ended June 30, 2025 and 2024, the Company had one major customer (related party) which accounted for approximately
Advertising Expense
Advertising costs are expensed as incurred. The Company did not incur advertising expense for the three and six months ended June 30, 2025 and 2024.
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 six months ended June 30, 2025 and 2024 our potential dilutive instruments were excluded from the weighted-average calculation
as they were antidilutive. Potential dilutive instruments as of June 30, 2025 and 2024 include the following: convertible notes payable,
which are convertible into approximately and shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of and shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of and shares of common stock. The Company issued free standing stock options to purchase
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 June 30, 2025, we had an accumulated deficit of approximately $112.1
million. As of June 30, 2025 and December 31, 2024, we had a working capital deficit of approximately $
During the six months ended June 30, 2025, subject to available cash flows,
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
Property, plant and equipment consisted of the following:
| June 30, 2025 |
December 31, 2024 |
|
||||||
| Vehicles and trailers | $ | $ | ||||||
| Equipment | ||||||||
| Land | ||||||||
| Building | ||||||||
| Crude & NGL terminal and related equipment | ||||||||
| Crude Oil Transfer Stations | ||||||||
| Pipeline and related facilities | ||||||||
| Equipment under finance lease | ||||||||
| Construction in process: | ||||||||
| Wash plant facilities | ||||||||
| Remediation Processing Unit System A | ||||||||
| Remediation Processing Unit System B | ||||||||
| WCCC tank expansion | ||||||||
| Accumulated Depreciation | ( |
) | ( |
) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
For the six months ended June 30, 2025 and 2024, the Company recorded depreciation $
9
Note 4. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest (various notes and loans payable) | ||||||||
| Accrued tax penalties and interest | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts payable- related parties | $ | $ | ||||||
| Accrued interest (notes payable)- related parties | ||||||||
| Accounts payable and accrued expenses- related parties | $ | $ | ||||||
| Accrued compensation | $ | $ | ||||||
As of June 30, 2025 and December 31, 2024, our accounts payable are primarily made up of trade payables.
Additionally, as of June 30, 2025, and December 31, 2024, accounts payable for consulting services rendered totaled $
As of June 30, 2025, accrued compensation to current employees includes $
10
Note 5. Loans and Notes Payable
Loans and notes payable and their maturities consist of the following:
Third party debt:
| June 30, 2025 |
December 31, 2024 |
|||||||
| Various promissory notes and convertible notes | $ | $ | ||||||
| Various promissory notes for vehicle financing | ||||||||
| Blue Ridge Bank | ||||||||
| Small Business Administration | ||||||||
| Al Dali International for Gen. Trading & Cont. Co. | ||||||||
| RSF, LLC | ||||||||
| Justin Ellis | ||||||||
| Cedarview Opportunities Master Fund LP | ||||||||
| Business First Bank | ||||||||
| Note payable to Pilot OFS Holdings, LLC | ||||||||
| Maxus Capital Group, LLC | ||||||||
| Curve Capital, LLC | ||||||||
| Clear Think Capital (b) | ||||||||
| Agile Capital Funding, LLC | ||||||||
| Short term note (c) | ||||||||
| JJ Astor (a) | ||||||||
| Total notes payable | $ | $ | ||||||
| Loans and notes payable, current | $ | $ | ||||||
| Loans and notes payable, long term | $ | $ | ||||||
11
Related party debt:
| June 30, 2025 |
December 31, 2024 |
|||||||
| Jorgan Development, LLC | $ | |||||||
| Ballengee Holdings, LLC | ||||||||
| James Ballengee | ||||||||
| Tyler Nelson | ||||||||
| Triple T Trading Company LLC | ||||||||
| Waskom, LLC | ||||||||
| Total notes payable- related parties | $ | $ | ||||||
| Loans and notes payable, current- related parties | $ | $ | ||||||
| Loans and notes payable, long term- related parties | $ | $ | ||||||
| Remaining 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| beyond | ||||
| Total | $ |
| (a) | ||
| (b) | ||
| (c) |
12
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.
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
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.
13
In 2025, we issued additional stock awards to
our Chief Executive Officer, of 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 $
There were no other options or awards granted during the six months ended June 30, 2025. The following table summarizes all stock option activity of the Company for the six months ended June 30, 2025 and 2024:
| Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
||||||||||
| Outstanding, December 31, 2024 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Forfeited | - | |||||||||||
| Outstanding, June 30, 2025 | $ | |||||||||||
| Exercisable, December 31, 2024 | $ | |||||||||||
| Exercisable, June 30, 2025 | $ | |||||||||||
As of June 30, 2025 and 2024, the aggregate intrinsic value of the Company’s outstanding options was approximately . The aggregate intrinsic value will change based on the fair market value of the Company’s common stock.
14
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 $
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 $
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 $
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 June 30, 2025 and 2024, we made crude oil purchases from WC Crude of $
15
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 was eliminated upon consolidation. For the six months ended June 30, 2025 and
2024, Endeavor rendered services in the amount of $
We have an existing note payable issued to Triple T, which is owned by Dr. Khalid Bin Jabor Al Thani, the
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 six months ended June 30, 2025, the Company realized related party trucking revenue related to this agreement of $
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 and six months ended June
30, 2025, the Company realized revenue related to this agreement of $
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 and six months ending June 30, 2025, the Company realized
revenue related to this agreement of $
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.
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 and six months ended June 30, 2025 are as follows:
16
Three Months Ended June 30, 2025
| Transportation Logistics Segment |
Terminaling and Storage Segment |
Corporate and other |
Total |
|||||||||||||
| Revenues | $ | $ | $ | |||||||||||||
| Revenues- related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | $ | |||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | ( |
) | ( |
) | ||||||||||||
| Loss on disposition of asset | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ||||||||||
| Interest expense- related parties | ( |
) | ( |
) | ||||||||||||
| Other income | ||||||||||||||||
| Total other income (expense) | ( |
) | ( |
) | ( |
) | ||||||||||
| Loss before provision for income taxes | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Consolidated net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Less: Net loss attributable to noncontrolling interests | ||||||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Six Months Ended June 30, 2025
| Transportation Logistics Segment |
Terminaling and Storage Segment |
Corporate and other |
Total Consolidated |
|||||||||||||
| Revenues | $ | $ | $ | |||||||||||||
| Revenues- related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | - | |||||||||||||||
| General and administrative | $ | |||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | ( |
) | ( |
) | ||||||||||||
| Loss on disposition of asset | ( |
) | ( |
) | ||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ||||||||||
| Interest expense- related parties | ( |
) | ( |
) | ||||||||||||
| Other income | ||||||||||||||||
| Total other income (expense) | ( |
) | ( |
) | ( |
) | ||||||||||
| Loss before provision for income taxes | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Consolidated net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Less: Net loss attributable to noncontrolling interests | ( |
) | ( |
) | ||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
17
Note 11. Subsequent Events
The Company has evaluated subsequent events through the date the financial statements were available to issue.
On
July 9, 2025, we entered into a Second Amendment to Loan Agreement and Registration Rights Agreement (the “Amendment”),
and an Additional Junior Secured Convertible Note (the “Additional Note”, together with the Amendment, the “New Loan
Documents”), under which we agreed to issue the Lender the Note in the principal amount of $
On
July 9, 2025,
On
July 30, 2025,
18
On July 30, 2025, Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Silver Fuels Processing, LLC, CPE Gathering Midcon, LLC, Vivakor, and Vivakor Transportation, LLC (collectively, the “Vivakor Obligors”), James H. Ballengee, Vivakor’s Chairman, President, and Chief Executive Officer, and certain related parties controlled directly or indirectly by Mr. Ballengee (collectively, the “Ballengee Obligors”), executed and entered into a Forbearance Agreement with Maxus Capital Group, LLC (“Maxus” and the “Forbearance Agreement”, respectively). Pursuant to the terms of the Forbearance Agreement, the Vivakor Obligors and the Ballengee Obligors agreed that (A) various events of default have occurred and are continuing to occur with respect to (i) Master Agreement No. 1450 dated March 17, 2020, by and between Maxus Capital Group, LLC, as Lessor, Silver Fuels Delhi, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1450 Lease”), (ii) Master Agreement No. 1452 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, Meridian Equipment Leasing, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1452 Lease”), (iii) Master Agreement No. 1462 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, White Claw Colorado City, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1462 Lease”, and together with the 1450 Lease and the 1452 Lease, the “Maxus Leases”), (B) Maxus will forbear and refrain from further action to enforce its rights under the Maxus Leases so long as no further events of default occur pursuant to the Forbearance Agreement, and (C) pursuant to the Maxus Leases, the Vivakor Obligors and Ballengee Obligors will pay or cause to be paid to Maxus the sum of $3,288,067 on or before September 1, 2025, the sum of $1,418,659 on or before October 1, 2025, the sum of $1,500,000 on or before November 30, 2025, the sum of $3,000,000 on or before November 30, 2025, the sum of $41,012 per month pursuant to the 1450 Lease, the sum of $592,974 per month pursuant to the 1452 Lease, and the sum of $188,031 per month pursuant to the 1462 Lease. Upon the execution of the Forbearance Agreement, the Vivakor Obligors and Ballengee Obligors must remit to Maxus a forbearance fee equal to (x) $250,000 cash and (b) restricted common shares of Vivakor in an amount equal to $250,000, priced per share based on the average closing price for the three (3) days preceding their issuance.
On August 12, 2025, we entered into a Second
Amendment to the Employment Agreement with Les Patterson, which amended that certain Employment Agreement dated July 1, 2025, as amended.
Under the Amended Agreement, Mr. Patterson accepted the position of Vice President and Chief Operating Officer of Vivakor, Inc. in exchange
for a base annual salary of $
19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that reflect management’s current views with respect to future events and financial performance. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report. The forward-looking statements made in this report are based only on events or information as of the date on which the statements are made in this report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents we refer to in this report and have filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.
20
As used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our” refer to Vivakor, Inc., its wholly owned and majority-owned active subsidiaries, or joint ventures (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. We have the following direct and indirect wholly-owned or majority-owned active subsidiaries: Endeavor Crude, LLC, a Texas limited liability company (since October 1, 2024), and Silver Fuels Processing, LLC, a Texas limited liability company (since October 1, 2024), Meridian Equipment Leasing, LLC, a Texas limited liability company (from October 1, 2024 to July 30, 2025), CPE Gathering Midcon, LLC, a Delaware limited liability company, Equipment Transport, LLC, a Pennsylvania limited liability company (from October 1, 2024 to July 30, 2025), ET EmployeeCo, LLC, a Pennsylvania limited liability company, Silver Fuels Delhi, LLC, a Louisiana limited liability company, White Claw Colorado City, LLC, a Texas limited liability company, Vivaventures Remediation Corp., a Texas corporation, Vivaventures Management Company, Inc., a Nevada corporation, Vivaventures Oil Sands, Inc., a Utah corporation, Vivakor Supply & Trading, LLC, a Texas limited liability company, Vivakor Administration, LLC, a Texas limited liability company, Vivakor Midstream, LLC, a Texas limited liability company, Vivakor Operating, LLC, a Texas limited liability company, Vivakor Transportation, LLC, a Texas limited liability company, and VM Facilities, LLC, a Texas limited liability company. We have a 99.95% ownership interest in VivaVentures Energy Group, Inc., a Nevada Corporation; the 0.05% minority interest in VivaVentures Energy Group, Inc. is held by a private investor unaffiliated with us. We also have an approximate 49% ownership interest in Vivakor Middle East Limited Liability Company and Vivakor Company Limited Liability Company, both Qatar limited liability companies. Vivakor manages and consolidates RPC Design and Manufacturing LLC, which includes a non-controlling interest investment from VivaOpportunity Fund, LLC, which is also managed by VivaVentures Management Company, Inc.
Business Overview
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) crude oil transportation services, and (ii) facility services for terminaling and storage of crude oil and constituent petroleum products and byproducts, including waste streams.
Our transportation services primarily consist of trucking transportation of crude oil and constituent products, including crude oil waste streams, and pipeline transportation of crude oil via the Omega Gathering Pipeline. Our truck transportation services are centered in Colorado’s DJ Basin, Central Oklahoma’s (STACK play, and the Permian and Eagle Ford Basins of Texas. These basins are among the most active regions for oil and natural gas exploration and development in the United States.1 On average, each new oil well in the Permian Basin produces approximately 1,300 barrels of crude oil or more per day.2 We utilize a crude oil trucking fleet to transport oil to a network of facilities where we blend waste streams and off-spec grades of crude oil. Immediate access to flexible and scalable truck transportation solutions are a vital component of oil and natural gas exploration and development. Likewise, our Omega Gathering Pipeline is an approximately forty-five (45) mile crude oil gathering and shuttle pipeline in Blaine County, Oklahoma, the heart of the STACK play. It is tied into the Cushing, Oklahoma storage hub via a connection to the Plains STACK Pipeline.
Our facilities services are comprised of fifteen (15) operated crude oil pipeline injection truck stations, the majority of which are centered in the Permian Basin. In addition, we have two operational major crude oil terminaling facilities. One is located in Colorado City, Texas, and is underpinned by a ten (10) year contract for a 100,000 per barrel per month minimum volume commitment. The other, located in Delhi, Louisiana, is backed by a contract with Denbury Onshore, LLC, a subsidiary of ExxonMobil Corporation, and provides for the sale of 60,000 net barrels per month of crude oil. Both facilities are located at the junction of several major interstate pipelines. In addition, we are currently constructing a remediation processing center (“RPC”) strategically located at the San Jacinto River & Rail Park in Harris County, Texas. Once complete, we expect the facility to be capable of processing oilfield solid wastes into economic byproducts such as condensate, propane, butane, and caliche. The RPC features an adjacent, complimentary truck wash facility from which we expect to derive additional revenue. We expect the RPC to commence operations in the fourth quarter of 2025. In 2023, we moved our other full-capacity RPC to Kuwait, where we are currently in negotiations with Kuwait Oil Company to potentially use the RPC to clean sands contaminated with oil, primarily from production wells destroyed during the Persian Gulf War.
| 1 | See: https://www.resilience.org/stories/2024-07-03/the-status-of-u-s-oil-production-2024-update-everything-shines-by-dimming | |
| 2 | See: https://www.eia.gov/petroleum/drilling/ |
21
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.
On July 30, 2025, we sold all of the issued and outstanding limited liability company membership interests in Meridian Equipment Leasing, LLC, a Texas limited liability company, and Equipment Transport, LLC, a Pennsylvania limited liability company (the “Water Trucking Sale”), pursuant to that certain Membership Interest Purchase Agreement of even date therewith by and between Vivakor Transportation, LLC, as Seller, and Jorgan Development, LLC, as Buyer (the “Water Trucking Sale Agreement”), in exchange for $11,058,235 USD paid in 11,058 shares of Series A Convertible Preferred Stock of Vivakor, Inc., which shares will no longer be considered outstanding or be entitled to the relevant annual dividend. The Buyer of such entities is controlled by James Ballengee, our Chairman, President, and Chief Executive Officer. The sale is subject to a one-time post-closing purchase price adjustment based on the sold subsidiaries’ financial results as reflected on Vivakor’s Form 10-Q Quarterly Report for the period ended June 30, 2025, which will be settled in Series A Convertible Preferred Stock of Vivakor, Inc. Prior to consummating the Water Trucking Sale, we transferred certain assets and liabilities between affiliates to comply with pre-existing debt covenants, facilitate crude oil trucking operations, and minimize potential operational disruption to our crude oil-focused businesses. In connection with the Water Trucking Sale, and among other agreements as further set forth in the Water Trucking Sale Agreement, (i) affiliates of Vivakor, and the Ballengee Family Office Affiliates, amended and restated that certain Transition Services Agreement dated October 1, 2024, to account for new and additional services to be provided by various parties thereto, (ii) the parties amended and restated that certain Secured Promissory Note dated August 15, 2022, by and between Vivakor, as Borrower, and Jorgan Development, LLC, as Lender, reducing the payments to Lender thereunder from ninety-nine percent (99%) of Monthly Free Cash Flow, as defined therein, to fifty percent (50%) of Monthly Free Cash Flow, and (iii) Mr. Ballengee and certain Ballengee Family Office Affiliates voluntarily suspended the right to receive dividends and distributions upon Series A Convertible Preferred Stock of Vivakor, Inc. held by them for the period from August 1, 2025 to January 1, 2026.
Reclassifications
Certain reclassifications may have been made to prior years’ amounts to conform to the 2025 presentation, including the purchase price allocation of accrued interest and principal note payable amounts to conform to the 2025 presentation.
Recent Developments
On March 17, 2025, the Company issued a junior secured convertible promissory note (the “Note”) due as described below, to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000 (the “Principal Amount”), in connection with a Loan and Security Agreement entered into by and between the Company, its subsidiaries, and the Lender (the “Agreement”). The Company received $5,000,000, before deduction of closing fees (the “Loan”). 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 (the “Commitment Shares”).
22
On May 20, 2025, we issued an aggregate of 1,764,964 shares of our restricted common stock for three months of dividends 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.
Between May 14, 2025 and June 9, 2025, we issued convertible promissory notes (the “Notes”), to seven non-affiliated accredited investors (the “Holders”), in the aggregate principal amount of $5,911,764 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 $5,025,000 prior to deducting placement agent fees of $391,500, Holders attorney’s fees of $20,000 and escrow fees of $5,000. The Notes matures 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 is 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 issuance of the Notes, we issued the Holders 753,750 shares of our common stock as additional incentive to enter into the SPA and the Notes.
As stated above, on March 17, 2025, Vivakor, Inc. (the “Company”), issued a junior secured convertible promissory note (the “Initial Note”) to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000 (the “Principal Amount”), in relation to a Loan and Security Agreement by and between the Company, its subsidiaries, and the Lender (the “Loan Agreement”). The Company received $5,000,000, before fees. The Company received the funds on March 18, 2025. In relation to the Loan Agreement, the Company also entered into a Registration Rights Agreement with the Lender (the “RRA”), under which the Company was obligated to file a resale registration statement with the SEC registering any shares of its common stock issuable under the Note no later than sixty (60) days after closing.
On July 9, 2025, we entered into a Second Amendment to Loan Agreement and Registration Rights Agreement (the “Amendment”), and an Additional Junior Secured Convertible Note (the “Additional Note”, together with the Amendment, the “New Loan Documents”), under which we agreed to issue the Lender the Note in the principal amount of $5,940,000. Under the New Loan Documents, we will receive net proceeds of $971,026, with the remainder of the principal amount going to (a) a $176,000 origination fee, (b) an aggregate of $3,232,976 (the “Holdback Amounts”) representing (i) a $891,000 holdback amount to be applied to pay the first six Weekly Installment Payments when due under the Additional Note (hereinafter defined), (ii) $1,395,540 to be applied to pay the seven past due Weekly Installment Payments under the Initial Note, plus accrued interest thereon, and (iii) $946,434 to secure and cover the payment of the next six Weekly Installment Payments due under the Initial Note, (c) $20,000 to pay Lender’s legal fees, and (d) and original issuance discount of $1,540,000. The Note is payable over forty equal weekly installments of $148,500, which may be paid in cash or, at the option of the Company once an applicable registration statement is effective, 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 in default and is subject to mandatory prepayment upon the receipt of proceeds from identified sales of equity interests in the Company and/or the receipt of certain extraordinary cash payments. In the event we default on the terms of the Initial Note or the Additional Note, the conversion price under the notes is a 50% discount to 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 lender is secured by a junior lien in all assets of the Company, subject to exceptions for existing debt covenants of the Company. The Company reserved 15,000,000 shares of its common stock for issuance in connection with a conversion under the Additional Note and the Company agreed to issue the Lender 150,000 shares of its common stock as additional consideration for the loan (the “Commitment Shares”). We received the funds under the New Loan Documents on July 15, 2025.
23
On July 9, 2025, we entered into a Forbearance and Amendment to Loan Agreement and Note, which amended the terms of the Loan Agreement, Initial Note and RRA (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement: (i) the Lender agreed to loan us an additional amount up to $4,400,000 under similar terms as the Initial Note (funds from which we received on July 15, 2025, as set forth below), (ii) the Lender agreed to permit us to raise an additional $3,000,000 under terms set forth on Exhibit I of the Loan Agreement, (iii) the filing date for the resale registration statement under the RRA was extended to July 18, 2025, (iv) the Outstanding Principal Amount of the Initial Note was $6,151,783 on the Forbearance Agreement Effective Date, (v) the principal amount under the Initial Note was increased to $6,766,961 (the “Amended Principal Amount”), representing 110% of the Outstanding Principal Amount of the Note as of the Forbearance Agreement Effective Date, (vi) the Weekly Installment Payments under the Initial Note stayed the same, (vii) the fee of $615,178 was added to the Amended Principal Amount of the Initial Note and shall be due and payable by the Company on or before January 7, 2026, (viii) past due interest totaling $291,367, that has accrued between the Forbearance Agreement Effective Date and the Effective Date, shall also be paid on or before January 7, 2026, and (ix) both the $615,178 fee and the $291,367 of past due interest shall be paid in full in cash on or before January 7, 2026.
On July 19, 2025, the Board of Directors of Vivakor received notice from Tyler Nelson, Vivakor’s Chief Financial Officer and Member of the Board of Directors of his resignation from such positions effective immediately.
On July 24, 2025, Vivakor Administration, LLC (the “Company”) entered into an executive employment agreement with Kimberly Hawley (the “Employment Agreement”) with respect to her appointment as Executive Vice President, Chief Financial Officer, and Treasurer of the Company and Vivakor, Inc. (“Vivakor”). Pursuant to the Employment Agreement, Ms. Hawley will receive annual compensation of $350,000. Additionally, Ms. Hawley shall be eligible for performance bonus compensation as further set forth therein. The Employment Agreement may be terminated by either party for any or no reason, by providing five business days’ notice of termination, but a termination without cause will trigger certain severance provisions, including a lump sum payment equal to one (1) calendar year’s pay.
On July 30, 2025, Vivakor Transportation, LLC, as Seller, executed and entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Jorgan Development, LLC (“Jorgan”) to sell all of the issued and outstanding limited liability company membership interests in and to Meridian Equipment Leasing, LLC, and Equipment Transport, LLC (the “Targets”), two indirectly wholly-owned subsidiaries of Vivakor, Inc. (“Vivakor”, and the “Transaction”, respectively). The purchase price paid to the Seller thereunder consisted of $11,058,235 USD to be remitted in Series A Convertible Preferred Stock of Vivakor, which shares will no longer be considered outstanding or be entitled to the relevant annual dividend. The purchase price is subject to upward or downward adjustment based on any difference in net equity of the Targets as reflected by the Targets’ final financial results for the period ending June 30, 2025. The Targets were principally engaged in the truck transportation of oilfield produced water and associated equipment leasing operations. In connection with the Transaction, and among other agreements as further set forth in the Purchase Agreement, (i) affiliates of Vivakor, and certain related parties controlled directly or indirectly by James H. Ballengee, Vivakor’s Chairman, President, and Chief Executive Officer (the “Ballengee Family Office Affiliates”) will amend and restate that certain Transition Services Agreement dated October 1, 2024, to account for new and additional services to be provided by various parties thereto, (ii) the parties will amend and restate that certain Secured Promissory Note dated August 15, 2022, by and between Vivakor, as Borrower, and Jorgan Development, LLC, as Lender, reducing the payments to Lender thereunder by almost one-half (1/2), from ninety-nine percent (99%) of certain free cash flow from certain of Vivakor’s terminal operations to fifty percent (50%) of free cash flow from such operations, and (iii) Mr. Ballengee and certain Ballengee Family Office Affiliates will voluntarily suspend the right to receive dividends and distributions upon Series A Convertible Preferred Stock of Vivakor, held by them for the period from August 1, 2025 to January 1, 2026.
24
On July 30, 2025, Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Silver Fuels Processing, LLC, CPE Gathering Midcon, LLC, Vivakor, and Vivakor Transportation, LLC (collectively, the “Vivakor Obligors”), James H. Ballengee, Vivakor’s Chairman, President, and Chief Executive Officer, and certain related parties controlled directly or indirectly by Mr. Ballengee (collectively, the “Ballengee Obligors”), executed and entered into a Forbearance Agreement with Maxus Capital Group, LLC (“Maxus” and the “Forbearance Agreement”, respectively). Pursuant to the terms of the Forbearance Agreement, the Vivakor Obligors and the Ballengee Obligors agreed that (A) various events of default have occurred and are continuing to occur with respect to (i) Master Agreement No. 1450 dated March 17, 2020, by and between Maxus Capital Group, LLC, as Lessor, Silver Fuels Delhi, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1450 Lease”), (ii) Master Agreement No. 1452 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, Meridian Equipment Leasing, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1452 Lease”), (iii) Master Agreement No. 1462 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, White Claw Colorado City, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1462 Lease”, and together with the 1450 Lease and the 1452 Lease, the “Maxus Leases”), (B) Maxus will forbear and refrain from further action to enforce its rights under the Maxus Leases so long as no further events of default occur pursuant to the Forbearance Agreement, and (C) pursuant to the Maxus Leases, the Vivakor Obligors and Ballengee Obligors will pay or cause to be paid to Maxus the sum of $3,288,067 on or before September 1, 2025, the sum of $1,418,660 on or before October 1, 2025, the sum of $1,500,000 on or before November 30, 2025, the sum of $3,000,000 on or before November 30, 2025, the sum of $41,012.06 per month pursuant to the 1450 Lease, the sum of $592,974 per month pursuant to the 1452 Lease, and the sum of $188,031 per month pursuant to the 1462 Lease. Upon the execution of the Forbearance Agreement, the Vivakor Obligors and Ballengee Obligors must remit to Maxus a forbearance fee equal to (x) $250,000.00 cash and (b) restricted common shares of Vivakor in an amount equal to $250,000.00, priced per share based on the average closing price for the three (3) days preceding their issuance.
Pursuant to a Transition Agreement dated August 3, 2025, by and between Vivakor and Vivakor Administration, LLC, as Company, and Russ M. Shelton (the “Transition Agreement), Mr. Shelton, resigned his position as Executive Vice President and Chief Operating Officer of the Company, concurrent therewith and agreed to assist in transitioning his responsibilities to his replacement. Mr. Shelton’s resignation is not the result of any disagreement with Vivakor or its independent auditors regarding its accounting or financial practices.
On August 12, 2025, we entered into a Second Amendment to the Employment Agreement with Les Patterson (the “Amended Agreement”), which amended that certain Employment Agreement dated July 1, 2025, as amended. Under the Amended Agreement, Mr. Patterson accepted the position of Vice President and Chief Operating Officer of Vivakor, Inc. in exchange for a base annual salary of $375,000 and annual equity compensation of shares of Vivakor’s common stock equal to not less than $125,000, paid to Mr. Patterson in four equal quarterly installments priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the Effective Date or annual anniversary of the Amended Agreement, as applicable, with the shares issued as registered common stock under a registered equity compensation plan. The Employment Agreement may be terminated by either party for any or no reason, by providing five business days’ notice of termination, but a termination without cause will trigger certain severance provisions, including a lump sum payment equal to six (6) months pay. Mr. Patterson will also receive a one-time signing bonus within seven (7) days from signing the Amended Agreement of Two Hundred Fifty Thousand Dollars ($250,000.00) of Vivakor common stock, which shall be issued pursuant to Vivakor’s Form S-8 Registration Statement filed with the U.S. Securities and Exchange Commission and shall be priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the date of this Second Amendment.
Results of Consolidated Operations for the Three Months Ended June 30, 2025 and 2024
Revenue
For the three months ended June 30, 2025 and 2024 we realized revenues of $29,099,446 and $16,181,122, respectively, representing an increase of $12,918,324 or 79.8%. The increase in revenue is primarily attributed to the sales of logistics and terminaling realized through the operations of our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Cost of Revenue
For the three months ended June 30, 2025 and 2024, our cost of revenues consisted primarily of costs associated with selling oil and natural gas liquid as well as the operations from our newly acquired businesses in logistics, which was acquired through our business combination which closed on October 1, 2024.
For the three months ended June 30, 2025 and 2024, costs of revenue were $24,519,777 and $15,070,308, respectively, representing an increase of $9,449,469 or 62.7%. The increase in the cost of revenue is primarily attributed to the cost of goods sold for our logistics and terminaling realized through the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
25
Gross Profit
For the three months ended June 30, 2025 and 2024 we realized gross profit of $4,579,669 and $1,110,814, respectively, representing an increase of $3,468,855 or 312.28%. The gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of our oil and natural gas liquid products.
Operating Expenses
For the three months ended June 30, 2025 and 2024, we realized operating expenses of $11,356,416 and $3,897,740 which represents an increase of $7,458,676 or 191.36%. Our operating expenses increased due to the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Interest Expense
For the three months ended June 30, 2025 and 2024, we realized total interest expense of $4,383,710 and $479,947, which represents an increase of $3,903,763, or 813.37%. The increase was primarily due to debt instruments entered into during the second quarter of 2025, along with the net effect of accrued interest on debt and finance leases assumed in connection with the acquisition of the Endeavor Entities on October 1, 2024.
Unrealized Gain/Loss on Marketable Securities
For the three months ended June 30, 2025 and 2024, we reported an unrealized loss of $1,731,160 and an unrealized loss of $0, which represents an increase of $1,731,160. Our marketable securities were considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gains or losses as noted above.
Segment Operating Results for the Three Months Ended June 30, 2025 and 2024
Operating Results of our Terminaling and Storage Segment:
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 13,396,481 | $ | 13,310,515 | $ | 85,966 | 1 | % | ||||||||
| Revenues- related party | 5,246,692 | 2,870,607 | 2,376,085 | 83 | % | |||||||||||
| Total revenues | 18,643,173 | 16,181,122 | 2,462,051 | 15 | % | |||||||||||
| Cost of revenues | 17,156,132 | 15,070,308 | 2,085,824 | 14 | % | |||||||||||
| Gross profit | 1,487,041 | 1,110,814 | 376,227 | 34 | % | |||||||||||
| Operating expenses: | - | - | ||||||||||||||
| General and administrative | 643,684 | 40,738 | 602,946 | 1480 | % | |||||||||||
| Amortization and depreciation | 995,397 | 1,048,339 | (52,943 | ) | (5 | )% | ||||||||||
| Total operating expenses | 1,639,081 | 1,089,077 | 550,003 | 51 | % | |||||||||||
| Gain (loss) from operations | (152,040 | ) | 21,737 | (173,776 | ) | (799 | )% | |||||||||
| - | - | |||||||||||||||
| Other income (expense): | - | - | ||||||||||||||
| Unrealized gain (loss) on marketable securities | - | - | - | - | ||||||||||||
| Loss on disposition of asset | - | - | - | - | ||||||||||||
| Gain deconsolidation of subsidiary | - | - | - | - | ||||||||||||
| Interest income | - | - | - | - | ||||||||||||
| Interest expense | - | (237,185 | ) | 237,185 | (100 | )% | ||||||||||
| Interest expense- related parties | - | - | - | - | ||||||||||||
| Other income | - | - | - | - | ||||||||||||
| Total other income (expense) | - | (237,185 | ) | 237,185 | (100 | )% | ||||||||||
| Loss before provision for income taxes | (152,040 | ) | (215,448 | ) | 63,408 | (29 | )% | |||||||||
| Consolidated net loss | (152,040 | ) | (215,448 | ) | 63,408 | (29 | )% | |||||||||
| Less: Net loss attributable to noncontrolling interests | - | - | - | - | ||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | (152,040 | ) | $ | (215,448 | ) | $ | 63,408 | (29 | )% | ||||||
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Revenue
The increase in revenue is primarily attributed to the net effect of our buy-sell agreements of crude petroleum products through the Enbridge North Dakota pipeline, which contracts we entered into in November 2024, where we realized revenue from these contacts in the amount of $17,087,318 for the three months ended June 30, 2025, and decreased volumes sold through our Silver Fuels Delhi facility as we continue to renegotiate our agreements with Exxon Mobile Corporation, who purchased the Denbury, Inc. facility that is attached to our pipeline facility and purchases our product from the Silver Fuels Delhi facility.
Cost of Revenue
The increase in the cost of revenue is primarily attributed to the net effect of our buy-sell agreements of crude petroleum products through the Enbridge North Dakota pipeline, which contracts we entered into in November 2024, where we realized costs of revenue from these contacts in the amount of $17,045,502 for the three months ended June 30, 2025, and decreased volumes sold through our Silver Fuels Delhi facility as we continue to renegotiate our agreements with Exxon Mobile Corporation, who purchased the Denbury, Inc. facility that is attached to our pipeline facility and purchases our product from the Silver Fuels Delhi facility.
Operating Results of our Transportation Logistics Segment:
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 7,601,942 | $ | - | $ | 7,601,942 | 100 | % | ||||||||
| Revenues- related party | 2,854,331 | - | 2,854,331 | 100 | % | |||||||||||
| Total revenues | 10,456,273 | - | 10,456,273 | 100 | % | |||||||||||
| Cost of revenues | 7,363,645 | - | 7,363,645 | 100 | % | |||||||||||
| Gross profit | 3,092,628 | - | 3,092,628 | 100 | % | |||||||||||
| Operating expenses: | - | - | - | - | ||||||||||||
| General and administrative | 1,520,438 | - | 1,520,438 | 100 | % | |||||||||||
| Amortization and depreciation | 5,389,294 | - | 5,389,294 | 100 | % | |||||||||||
| Total operating expenses | 6,909,732 | - | 6,909,732 | 100 | % | |||||||||||
| Loss from operations | (3,817,104 | ) | - | (3,817,104 | ) | 100 | % | |||||||||
| - | - | |||||||||||||||
| Other income (expense): | - | - | ||||||||||||||
| Unrealized gain (loss) on marketable securities | - | - | - | - | ||||||||||||
| Loss on disposition of asset | 378,000 | - | 378,000 | 100 | % | |||||||||||
| Gain deconsolidation of subsidiary | - | - | - | - | ||||||||||||
| Interest income | 15,522 | - | 15,522 | 100 | % | |||||||||||
| Interest expense | (4,188,919 | ) | - | (4,188,919 | ) | 100 | % | |||||||||
| Interest expense- related parties | - | - | - | - | ||||||||||||
| Other income | 12,540 | - | 12,540 | 100 | % | |||||||||||
| Total other income (expense) | (3,782,857 | ) | - | (3,782,857 | ) | 100 | % | |||||||||
| Loss before provision for income taxes | (7,599,961 | ) | - | (7,599,961 | ) | 100 | % | |||||||||
| Consolidated net loss | (7,599,961 | ) | - | (7,599,961 | ) | 100 | % | |||||||||
| Less: Net loss attributable to noncontrolling interests | - | - | - | - | ||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | (7,599,961 | ) | $ | - | $ | (7,599,961 | ) | 100 | % | ||||||
This operating segment in its entirety was acquired from our business combination acquisition of the Endeavor Entities’ businesses, which closed on October 1, 2024.
27
Operating Results of our Corporate and Other:
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.
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | - | $ | - | $ | - | - | |||||||||
| Revenues- related party | - | - | - | - | ||||||||||||
| Total revenues | - | - | - | - | ||||||||||||
| Cost of revenues | - | - | - | - | ||||||||||||
| Gross profit | - | - | - | - | ||||||||||||
| Operating expenses: | - | - | - | - | ||||||||||||
| General and administrative | 2,321,344 | 2,868,582 | (547,238 | ) | (19 | )% | ||||||||||
| Amortization and depreciation | 486,259 | (59,919 | ) | 546,178 | (912 | )% | ||||||||||
| Total operating expenses | 2,807,603 | 2,808,663 | (1,060 | ) | 0 | % | ||||||||||
| Loss from operations | (2,807,5603 | ) | (2,808,663 | ) | 1,060 | 0 | % | |||||||||
| - | - | |||||||||||||||
| Other income (expense): | - | - | ||||||||||||||
| Unrealized gain (loss) on marketable securities | (1,731,160 | ) | 20 | (1,731,180 | ) | (8,655,900 | )% | |||||||||
| Loss on disposition of asset | - | (177,550 | ) | 177,550 | (355,100 | ) | ||||||||||
| Gain deconsolidation of subsidiary | - | 177,550 | (177,550 | ) | (100 | )% | ||||||||||
| Interest income | 2,306 | 2,306 | - | - | ||||||||||||
| Interest expense | (194,791 | ) | (242,762 | ) | 47,971 | (20 | )% | |||||||||
| Interest expense- related parties | (53,121 | ) | - | (53,121 | ) | 100 | % | |||||||||
| Other income | - | 30,000 | (30,000 | ) | (100 | )% | ||||||||||
| Total other income (expense) | (1,976,766 | ) | (210,436 | ) | (1,766,330 | ) | 840 | % | ||||||||
| Loss before provision for income taxes | (4,784,369 | ) | (3,019,099 | ) | (1,765,270 | ) | 58 | % | ||||||||
| Consolidated net loss | (4,784,369 | ) | (3,019,099 | ) | (1,765,270 | ) | 59 | % | ||||||||
| Less: Net loss attributable to noncontrolling interests | (20,240 | ) | 20,240 | (100 | )% | |||||||||||
| Net loss attributable to Vivakor, Inc. | $ | (4,784,369 | ) | $ | (2,998,859 | ) | $ | (1,785,510 | ) | 60 | % | |||||
Operating Expenses
Our operating expenses increased due to the acquisition of the workforce of the Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024, including multiple new executives and administrative personnel, and hired additional consultants.
Unrealized Gain/Loss on Marketable Securities
Our marketable securities are considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gains as noted above.
28
Results of Consolidated Operations for the Six Months Ended June 30, 2025 and 2024
Revenue
For the six months ended June 30, 2025 and 2024 we realized revenues of $66,439,737 and $32,202,513, respectively, representing an increase of $34,237,224 or 106.3%. The increase in revenue is primarily attributed to the sales of logistics and terminaling realized through the operations of our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Cost of Revenue
For the six months ended June 30, 2025 and 2024, our cost of revenues consisted primarily of costs associated with selling oil and natural gas liquid as well as the operations from our newly acquired businesses in logistics, which was acquired through our business combination which closed on October 1, 2024.
For the six months ended June 30, 2025 and 2024, costs of revenue were $57,101,634 and $30,023,562, respectively, representing an increase of $27,078,072 or 90.19%. The increase in the cost of revenue is primarily attributed to the cost of goods sold for our logistics and terminaling realized through the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Gross Profit
For the six months ended June 30, 2025 and 2024 we realized gross profit of $9,338,103 and $2,178,951, respectively, representing an increase of $7,159,152 or 328.56%. The gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of our oil and natural gas liquid products.
Operating Expenses
For the six months ended June 30, 2025 and 2024, we realized operating expenses of $22,557,295 and $6,648,287, which represents an increase of $15,909,008, or 239.3%. Our operating expenses increased due to the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Interest Expense
For the six months ended June 30, 2025 and 2024, we realized total interest expense of $5,567,908 and $923,987, which represents an increase of $4,643,921, or 502.6%. The increase was primarily due to debt instruments entered into during the second quarter of 2025, along with the net effect of accrued interest on debt and finance leases assumed in connection with the acquisition of the Endeavor Entities on October 1, 2024.
Unrealized Gain/Loss on Marketable Securities
For the six months ended June 30, 2025 and 2024, we reported an unrealized loss of $78,406 and $82,618, which represents a decrease of $4,22, or 5.10%. Our marketable securities were considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gains or losses as noted above.
29
Segment Operating Results for the Six Months Ended June 30, 2025 and 2024
Operating Results of our Terminaling and Storage Segment:
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 35,222,983 | $ | 26,223,680 | $ | 8,999,303 | 34 | % | ||||||||
| Revenues- related party | 7,284,226 | 5,978,833 | 1,305,393 | 22 | % | |||||||||||
| Total revenues | 42,507,209 | 32,202,513 | 10,304,696 | 32 | % | |||||||||||
| Cost of revenues | 39,971,144 | 30,023,562 | 9,947,582 | 33 | % | |||||||||||
| Gross profit | 2,536,065 | 2,178,951 | 357,114 | 16 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 878,376 | 273,692 | 604,684 | 221 | % | |||||||||||
| Amortization and depreciation | 1,840,223 | 1,790,848 | 49,374 | 3 | % | |||||||||||
| Total operating expenses | 2,718,599 | 2,064,540 | 654,058 | 32 | % | |||||||||||
| Gain (loss) from operations | (182,534 | ) | 114,411 | (296,944 | ) | (260 | )% | |||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | - | - | - | - | ||||||||||||
| Loss on disposition of asset | - | - | - | - | ||||||||||||
| Gain deconsolidation of subsidiary | - | - | - | - | ||||||||||||
| Interest income | - | - | - | - | ||||||||||||
| Interest expense | - | (362,186 | ) | 362,186 | (100 | )% | ||||||||||
| Interest expense- related parties | - | - | - | - | ||||||||||||
| Other income | - | - | - | - | ||||||||||||
| Total other income (expense) | - | (362,186 | ) | 362,186 | (100 | )% | ||||||||||
| Loss before provision for income taxes | (182,534 | ) | (247,775 | ) | 65,241 | (26 | )% | |||||||||
| Consolidated net loss | (182,534 | ) | (247,775 | ) | 65,241 | (26 | )% | |||||||||
| Less: Net loss attributable to noncontrolling interests | - | - | - | - | ||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | (182,534 | ) | $ | (247,775 | ) | $ | 65,241 | (26 | )% | ||||||
Revenue
The increase in revenue is primarily attributed to the net effect of our buy-sell agreements of crude petroleum products through the Enbridge North Dakota pipeline, which contracts we entered into in November 2024, where we realized revenue from these contacts in the amount of $30,357,128 for the six months ended June 30, 2025, and decreased volumes sold through our Silver Fuels Delhi facility as we continue to renegotiate our agreements with Exxon Mobile Corporation, who purchased the Denbury, Inc. facility that is attached to our pipeline facility and purchases our product from the Silver Fuels Delhi facility.
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Cost of Revenue
The increase in the cost of revenue is primarily attributed to the net effect of our buy-sell agreements of crude petroleum products through the Enbridge North Dakota pipeline, which contracts we entered into in November 2024, where we realized costs of revenue from these contacts in the amount of $30,288,928 for the six months ended June 30, 2025, and decreased volumes sold through our Silver Fuels Delhi facility as we continue to renegotiate our agreements with Exxon Mobile Corporation, who purchased the Denbury, Inc. facility that is attached to our pipeline facility and purchases our product from the Silver Fuels Delhi facility.
Operating Results of our Transportation Logistics Segment:
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 18,563,956 | $ | - | $ | 18,563,956 | 100 | % | ||||||||
| Revenues- related party | 5,368,572 | - | 5,368,572 | 100 | % | |||||||||||
| Total revenues | 23,932,528 | - | 23,932,528 | 100 | % | |||||||||||
| Cost of revenues | 17,130,490 | - | 17,130,490 | 100 | % | |||||||||||
| Gross profit | 6,802,038 | - | 6,802,038 | 100 | % | |||||||||||
| Operating expenses: | - | - | - | |||||||||||||
| General and administrative | 3,876,322 | - | 3,876,322 | 100 | % | |||||||||||
| Amortization and depreciation | 9,963,366 | - | 9,963,366 | 100 | % | |||||||||||
| Total operating expenses | 13,839,688 | - | 13,839,688 | 100 | % | |||||||||||
| Loss from operations | (7,037,650 | ) | - | (7,037,650 | ) | 100 | % | |||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | - | - | - | - | ||||||||||||
| Loss on disposition of asset | (1,219,913 | ) | - | (1,219,913 | ) | 100 | % | |||||||||
| Gain deconsolidation of subsidiary | - | - | - | - | ||||||||||||
| Interest income | 38,697 | - | 38,697 | 100 | % | |||||||||||
| Interest expense | (5,128,348 | ) | - | (5,128,348 | ) | 100 | % | |||||||||
| Interest expense- related parties | - | - | - | - | ||||||||||||
| Other income | 25,080 | - | 25,080 | 100 | % | |||||||||||
| Total other income (expense) | (6,284,484 | ) | - | (6,284,484 | ) | 100 | % | |||||||||
| Loss before provision for income taxes | (13,322,134 | ) | - | (13,322,134 | ) | 100 | % | |||||||||
| Consolidated net loss | (13,322,134 | ) | - | (13,322,134 | ) | 100 | % | |||||||||
| Less: Net loss attributable to noncontrolling interests | - | - | - | - | ||||||||||||
| Net loss attributable to Vivakor, Inc. | $ | (13,322,134 | ) | $ | - | $ | (13,322,134 | ) | 100 | % | ||||||
This operating segment in its entirety was acquired from our business combination acquisition of the Endeavor Entities’ businesses, which closed on October 1, 2024.
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Operating Results of our Corporate and Other:
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.
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | - | $ | - | $ | - | - | |||||||||
| Revenues- related party | - | - | - | - | ||||||||||||
| Total revenues | - | - | - | - | ||||||||||||
| Cost of revenues | - | - | - | - | ||||||||||||
| Gross profit | - | - | - | - | ||||||||||||
| Operating expenses: | - | - | - | |||||||||||||
| General and administrative | 5,100,045 | 4,311,634 | 788,411 | 18 | % | |||||||||||
| Amortization and depreciation | 898,963 | 206,625 | 692,338 | 335 | % | |||||||||||
| Total operating expenses | 5,999,008 | 4,518,259 | 1,480,749 | 33 | % | |||||||||||
| Loss from operations | (5,999,008 | ) | (4,518,259 | ) | (1,480,749 | ) | 33 | % | ||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain (loss) on marketable securities | (78,406 | ) | (82,618 | ) | 4,212 | (5 | )% | |||||||||
| Loss on disposition of asset | - | - | - | - | ||||||||||||
| Gain deconsolidation of subsidiary | - | 177,550 | (177,550 | ) | (100 | )% | ||||||||||
| Interest income | 4,613 | 4,613 | - | - | ||||||||||||
| Interest expense | (439,560 | ) | (561,801 | ) | 122,241 | (22 | )% | |||||||||
| Interest expense- related parties | (53,121 | ) | - | (53,121 | ) | 100 | % | |||||||||
| Other income | - | 84,000 | (84,000 | ) | (100 | )% | ||||||||||
| Total other income (expense) | (566,474 | ) | (378,256 | ) | (188,218 | ) | 50 | % | ||||||||
| Loss before provision for income taxes | (6,565,482 | ) | (4,896,515 | ) | (1,670,869 | ) | 34 | % | ||||||||
| Consolidated net loss | (6,567,482 | ) | (4,896,515 | ) | (1,668,967 | ) | 34 | % | ||||||||
| Less: Net loss attributable to noncontrolling interests | (6,518 | ) | (48,548 | ) | 42,030 | (87 | )% | |||||||||
| Net loss attributable to Vivakor, Inc. | $ | (6,558,964 | ) | $ | (4,848,767 | ) | $ | (1,710,197 | ) | 35 | % | |||||
Operating Expenses
Our operating expenses increased due to the acquisition of the workforce of the Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024, including multiple new executives and administrative personnel, and hired additional consultants.
Unrealized Gain/Loss on Marketable Securities
Our marketable securities are considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gains as noted above.
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Cash Flows
The following table sets forth the primary sources and uses of cash and cash equivalents for the six months ended June 30, 2025 and 2024 as presented below:
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash (used) in operating activities | $ | (6,980,336 | ) | $ | (825,314 | ) | ||
| Net cash provided (used) in investing activities | 1,860,000 | (2,176,798 | ) | |||||
| Net cash provided (used) by financing activities | 5,108,500 | 2,352,775 | ||||||
Liquidity and Capital Resources
We have historically suffered net losses and cumulative negative cash flows from operations, and as of June 30, 2025, we had an accumulated deficit of approximately $112.1 million. As of June 30, 2025 and December 31, 2024, we had a working capital deficit of approximately $105.8 million and $101.5 million, respectively. As of June 30, 2025, we had cash of approximately $3.7 million, of which $3.2 million is restricted cash. In addition, we have obligations to pay approximately $74 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. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $3,665,156 and $3,676,992 which includes $3.2 million and $3 million as restricted cash, respectively.
For the six months ended June 30, 2025 and 2024, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $20,070,150 and $5,243,781, and our depreciation and amortization of $12,702,552 and $1,997,473. For the six months ended June 30, 2025 and 2024, we realized stock-based compensation of $690,350 and $1,138,052 in lieu of using cash. We also experienced an increase in accounts receivable of $17,309,724 and $845,872, an increase in prepaid expenses of $1,583,825 and $105,509, and an increase in accounts payable and accrued expenses of $14,297,080 and $2,331,635.
For the six months ended June 30, 2025, our net cash from investing activities of $1,860,000 was attributed to proceeds from the sale of property and equipment. For the six months ended June 30, 2024, our net cash used in investing activities was $2,176,798 attributed to our purchase of equipment related to the manufacturing of our RPC, wash plant facilities, and a White Claw Colorado City site extension on our pipeline.
Our net cash provided by our financing activities was mainly attributed to the net effect of the following events:
For the six months ended June 30, 2025 and 2024, we received proceeds of $10,396,612 and $3,132,959 related to the issuance of notes and other loans to third parties, and proceeds of $1,911,432 and $635,150 related to the issuance of notes and other loans from related parties. For the six months ended June 30, 2025 and 2024, we paid notes payable and lease liabilities of $4,812,898 and $477,610 to third parties, and paid notes payable and lease liabilities of $1,164,601 and $700,478 to related parties.
Capitalized interest on construction in process was none and $656,492 for the six months ended June 30, 2025 and 2024. There are no further existing firm obligations; however, we anticipate further construction costs of approximately $1.5 million in connection with our construction of our Texas remediation and wash plant facilities.
Our ability to continue to access capital could be affected adversely by various factors, including general market and other economic conditions, interest rates, the perception of our potential future earnings and cash distributions, any unwillingness on the part of lenders to make loans to us and any deterioration in the financial position of lenders that might make them unable to meet their obligations to us. If we cannot raise capital through public or private debt financings, equity offerings, or other means, our ability to grow our business may be negatively affected. In such case, we may need to suspend site and plant construction or further acquisitions until market conditions improve.
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Contractual Obligations
Our contractual obligations as of June 30, 2025 for finance lease liabilities are for certain land, property, plant, and equipment, which leases end in 2025 and 2026. Finance lease obligations as of June 30, 2025 are as follows:
| 2025 | $ | 3,626,851 | ||
| 2026 | 4,554,101 | |||
| Total | $ | 8,180,952 |
Our contractual obligations as of June 30, 2025 for operating lease liabilities are for office warehouse space, land, and truck yards, which leases end in 2026 through 2027, except for a land lease which ends in 2042. Contractual payments under operating lease obligations as of June 30, 2025 are as follows:
| Remaining 2025 | $ | 1,318,150 | ||
| 2026 | $ | 1,246,055 | ||
| 2027 | $ | 261,441 | ||
| 2028 | $ | 173,899 | ||
| 2029 | $ | 177,855 | ||
| Thereafter | $ | 2,562,277 | ||
| Total | $ | 5,739,677 |
Interest Rate and Market Risk
Interest rate risk is the potential for reduced net interest income and other rate-sensitive income resulting from adverse changes in the level of interest rates. We do not have variable interest rate-sensitive income agreements. We do have financing arrangements that were issued on August 1, 2022 as consideration for the business combination and acquisition of SFD and WCCC, in which the three year notes have variable interest rates based on the prime rate, which exposes us to further interest expense if the prime rate increases.
Market Risk - Equity Investments
Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates or other factors. We own equity securities that are publicly traded. Because the fair value of these securities may fall below the cost at which we acquired them, we are exposed to the possibility of loss. Equity investments are approved, monitored, and evaluated by members of management.
Inflation
Prolonged periods of slow growth, significant inflationary pressures, volatility and disruption in financial markets, could lead to increased costs of doing business. Inflation generally will cause suppliers to increase their rates, and inflation may also increase employee salaries and benefits. In connection with such rate increases, we may or may not be able to increase our pricing to consumers. Inflation could cause both our investment and cost of revenue to increase, thereby lowering our return on investment and depressing our gross margins.
Off Balance Sheet Arrangements
None.
Critical Accounting Policies & Use of Estimates
There have been no material changes to our critical accounting policies and the use of estimates from these disclosures reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on April 15, 2025.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact there are resource constraints and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Our management, with the participation of our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weaknesses described below, as of June 30, 2025, our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are: (1) We did not have enough personnel in our accounting and financial reporting functions. Due to insufficient personnel in our accounting department, we were not able to achieve adequate segregation of duties, and, as a result, we did not have adequate review controls surrounding: (i) our technical accounting matters in our financial reporting process, and (ii) the work of specialists involved in the estimation process. (2) Due to certain relationships with a banking institution and consultants we were not able to achieve adequate controls surrounding the review and dual authorization of certain treasury transactions and fixed assets. (3) We do not always follow certain review and authorization procedures related to corporate governance and the release of information to the public. After failing to adhere to certain corporate governance administrative procedures, we did not achieve adequate review at the executive or independent Board of Director level over certain accounting and risk assessments or the timely reporting of material transactions. We also did not achieve adequate review of certain public reports and disclosures prior to the public disclosure of the information. These control deficiencies, which are pervasive in nature, result in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis. Management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in both proper drafting, review, authorization, recording and reporting of these transactions. Since our assessment as of June 30, 2025, we continue to seek to retain additional experienced personnel, and we are working to retain additional qualified valuation experts that report on their internal controls. We have also implemented further review controls and processes surrounding treasury and fixed assets, and the Audit Committee is reviewing the material weaknesses, and will be making recommendations to the Company on implementing further internal controls to assist the Company to adhere to its corporate review, authorization, and reporting policies.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
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Changes in Internal Control Over Financial Reporting
As noted above, we continue to contract with additional external accounting staff in order to attempt to remediate our material weaknesses. Such changes include multiple additional reviewers of financial information before it is submitted for filing with the SEC. There were no other changes in our internal controls identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the three months ended June 30, 2025 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Vivakor, Inc. v. Al-Dali International General Trading and Contracting Company, et al., Case No. JDFC603 251052410 (Kuwait Court of First Instance, Mar. 25, 2025)—Plaintiff has asserted claims for breach of contract, unjust enrichment, and injunctive relief against Defendants Al-Dali Global Trading and Contracting Company, Al-Sayer Construction General Trading and Contracting Company, and Kuwait Oil Company relating to the placement and operation of oilfield remediation processing equipment in Kuwait. Plaintiff seeks total damages in excess of $15,000,000.00.
Vivakor, Inc., et al., v. Unique Funding Solutions, LLC et al., Cause No. DC-25-05926 (95th Dist. Ct., Dallas Cty., Tex.—April 15, 2025)—Plaintiffs allege fraud, fraudulent liens, fraudulent inducement, conversion, money had and received, and seek a declaratory judgment relating to claims of Defendants for payment on a receivables factoring contract claiming damages in excess of $5 million. The case is in initial pleadings. Plaintiffs intend to vigorously pursue the case.
AE Systems, LLC v. VivaVentures Remediation Corporation, (In re AE Systems, LLC) Ch. 7 Case No. 25-30186, Adv. No. 460285 (Bankr. S.D. Tex., filed Aug. 8, 2025)—Debtor claims breach of contract and damages of $156,356.00 for goods provided and services performed at Defendant’s site in Harris County, Texas. Defendant has contested the amount due on grounds that Debtor materially breached with their contract. Defendant has contested Debtor’s claims. No amount has been reserved in connection with the dispute.
Blondo Constructors, Inc. v. VivaVentures Remediation Corporation, et al., American Arbitration Association (Case No. 01-24-0005-5102—May 17, 2024)—Claimant demanded arbitration for claims relating to breach of contract by Respondent VivaVentures Remediation Corporation (“VRC”) and damages in excess of $545,695.05, plus attorneys fees and costs. Respondents other than VRC were dismissed on July 26, 2024. On November 8, 2024, the parties executed a Confidential Settlement Agreement to resolve the dispute. On December 20, 2024, Claimant filed a First Amended Demand for Arbitration asserting new claims, including for breach of the settlement agreement for failure to remit the agreed settlement payment. On January 26, 2025, Respondent remitted the settlement payment and Claimant confirmed receipt. Claimant’s new claims are still pending before the arbitrator, and the arbitrator has yet to issue an award or dismiss the proceeding. Respondent has not reserved additional sums for this proceeding.
Echo Contracting, LLC v. CPE Gathering Midcon, LLC, et al., Case No. CJ-2025-73 (Dist. Ct., Blaine Cty., Okla.—Feb. 14, 2025)—Plaintiff Echo Contracting asserted claims of breach of contract, quantum meriut, and foreclosure of mechanics and materialmen’s lien filed in Blaine County against properties of Defendants. Defendants CPE Gathering Midcon, LLC and Vivakor, Inc. settled such claims pursuant to confidential agreement on March 28, 2025, and such claims are pending dismissal and such liens are pending release. Co-Defendant Validus Energy II Midcon, LLC prevailed upon a motion to consolidate Case No. CJ-2025-7 with another the proceeding. Defendant and Cross-Plaintiff Validus Energy II Midcon, LLC has levied claims for breach of contract, declaratory judgment, indemnification, contribution, and unjust enrichment against Defendants CPE Gathering Midcon, LLC and Vivakor, Inc. and seeks damages of more than $500,000.00, plus attorneys fees and costs of court. Defendants CPE Gathering Midcon, LLC, Vivakor, Inc., and Validus Energy II Midcon, LLC prevailed on motions against Plaintiff to remove liens against property of Validus Energy II Midcon, LLC and compel arbitration against Defendants CPE Gathering Midcon, LLC and Vivakor, Inc. Claims of Plaintiff against Defendants CPE Gathering Midcon, LLC and Vivakor, Inc. are stayed pending arbitration, while claims of Defendant and Cross-Plaintiff Validus Energy II Midcon, LLC are proceeding.
Espri L’Heureux v. Vivakor, Inc., et al. Case No. 30-2022-01284070-CU-WT-CJC (Sup. Ct. Orange Cty., Cal.—Sept. 29, 2022)—Plaintiff asserted claims for misclassification as an exempt employee, failure to provide meal and rest periods, pregnancy/sex discrimination under the Fair Employment and Housing Act, discrimination under the California Fair Employment and Housing Act (“CFRA”), retaliation under the CFRA, wrongful termination, an unfair business practices under the California Business and Professions Code §§ 17200 et seq., among other derivative claims. Plaintiff seeks more than $1,000,000.00 in damages. Defendants dispute liability on the grounds Plaintiff was properly classified as an independent contractor, was not discriminated against, and was not terminated at all, much less for a discriminatory or retaliatory reason. Defendants filed their answer on November 21, 2022, and removed the action to federal district court on July 22, 2023.
Great Lakes Petroleum Co. v. Vivakor, Inc., as successor in interest of Equipment Transport, LLC, et al., Case No. 25-CVS-011392-590 (Sup. Ct., Mecklenburg Cty. N. Car.—Mar. 5, 2025)—Plaintiff alleged breach of contract, quantum meruit, and unjust enrichment for fuel sold and tank services provided. A default judgment for $183,808.77, plus post-judgment interest at a rate of eight percent (8%) per annum, was entered on May 23, 2025. Vivakor is in the process of attempting to settle this matter outside of the litigation.
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James Samuelson v. Vivakor, Inc., James Ballengee, et al., Case No. 30-2025-01496877-CU-OE-CJC (Sup. Ct. Orange Cty., Cal.—July 14, 2025)—Plaintiff asserts claims for failure to pay wages, employment misclassification, breach of contract, promissory estoppel, unjust enrichment, constructive discharge, and tortious interference with contract seeking damages of $1,277,499.95 plus pre- and post-judgment interest, attorneys fees, and costs of court. Vivakor plans to file a timely responsive pleading and vigorously defend against these claims.
Julie Ridenhour Tonroy, as Personal Representative of the Estate of John Ridenhour, Deceased, v. Endeavor Crude, LLC, et al., Case No. CJ-2024-40 (Dist. Ct., Blaine Cty., Okla.—March 21, 2024)—Plaintiff asserts claims of negligence, respondeat superior, and wrongful death of decedent related to a motor vehicle accident involving a driver for EC while operating motor vehicle equipment owned or leased by Meridian Equipment Leasing, LLC, both subsidiaries of the Vivakor, Inc., and presently seeks damages in excess of $1,000,000. Discovery has largely concluded and the case is set for trial in September 2025.
Kellie Yates v. Endeavor Crude, LLC et al., No. 656,058 (1st Jud. Dist. Ct., Caddo Parish, La.—Mar. 14, 2025)—Plaintiff asserts claims of negligence, lost wages, quantum meruit, and unjust enrichment relating to a May 28, 2024 motor vehicle accident, and seeks damages of $50,000 to $1,000,000.
Kush Properties, LLC d/b/a Motel 6 – Floresville d/b/a Eagle Ford Inn, et al., v. Endeavor Crude, LLC, et al Case No. CVW2505285 (81st Dist. Ct. Wilson Cty., Tex.—May 8, 2025) —Plaintiff alleges breach of contract, unjust enrichment, suit on sworn account, fraud, fraudulent inducement, and negligent misrepresentation relating to lodging charges for truck drivers, seeking $256,070.00, plus attorneys fees, costs of court, and pre- and post-judgment interest. Defendants’ are vigorously contesting the claims.
Mikasa McKnight v. Endeavor Crude, LLC, et al., Case No. 202422195 (190th Dist. Ct., Harris Cty., Tex.—Jul. 2, 2024)—Plaintiff alleges negligence, negligent hiring, negligent entrustment, and respondeat superior relating to a motor vehicle accident involving a tractor-trailer operated under the motor carrier authority of Defendant EC, and seeks damages in excess of $1,000,000. Defendant EC has vigorously contested the case.
Misty Kitson, Blaine County Assessor v. Meridian Equipment Leasing, LLC, Case No. EQ-2023-57 (Ct. of Tax Review, Okla.—Aug. 2, 2023)—Plaintiff governmental taxing authority seeks appeal of Defendant’s fair cash value valuation of certain personal property in Blaine County, Oklahoma. Plaintiff seeks a property tax valuation of $27,463,542.00 in contrast to Defendant’s valuation of $4,000,000.00, and overdue taxes in excess of $1,126,005.22, plus statutory interest, penalties, and fees. The case is in discovery.
MV Purchasing, LLC et al., v. Endeavor Crude, LLC, et al., v. Unique Funding Solutions, LLC, et al., No. 3:25-cv-01112-K (U.S. Dist. Ct.—N. Tex.)—Plaintiffs Endeavor Crude, LLC, et al., assert claims for fraud, fraudulent misrepresentation, unjust enrichment, and declaratory relief for more than $1.5 million relating to an accounts receivable factoring contract. Cross-plaintiffs MV Purchasing, LLC and Echo Canyon Energy Products Supply, LLC assert claims for declaratory relief. Cross-plaintiffs and Defendants Unique Funding Solutions, LLC, Rocket Capital NY LLC, and Regain Group LLC assert claims of breach of contract against Defendants Endeavor Crude, LLC, et al., seek declaratory relief against Cross-plaintiffs MV Purchasing, LLC and Echo Canyon Energy Products Supply, LLC, and collectively seek damages in excess of $3,000,000. Defendants Endeavor Crude, LLC, et al., are vigorously defending the case.
Novella Strmiska v. Endeavor Crude, LLC, et al., Case No. 25-01-00013-CVK (81st Dist. Ct., Karnes Cty., Tex.—Jan. 27, 2025)—Plaintiff obtained a default judgment for breach of contract, trespass to land, trespass to chattels, negligence, and unjust enrichment, for $256,717.00 USD, plus post-judgment interest, attorneys fees, and costs of court.
Rocket Capital NY LLC v. Silver Fuels Processing, LLC, et al., Case No. E2025013794 (Sup. Ct. of N.Y., Monroe County, N.Y.—Jun. 23, 2025)—Plaintiff has obtained a default judgment for $1,514,619.08 for breach of contract jointly and severally against affiliates Meridian Equipment Leasing, LLC, Silver Fuels Processing, LLC, Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Vivakor, Inc., Equipment Transport, LLC, and James Ballengee, among others. Vivakor is in the process of attempting to settle this matter outside of the litigation.
Texas Premier Resources, LLC et al., v. Vivakor, Inc., et al., Cause No. 2025-39438 (190th Dist. Ct., Harris Cty., Tex.—Jun. 16, 2025)—Plaintiffs have asserted claims for breach of contract, fraud, fraudulent misrepresentation, and alter ego, and seek damages in excess of $5,000,000.00, plus attorneys fees and costs of court, and injunctive relief to compel the purchase of Plaintiff’s business and property. Defendants are vigorously contesting the case.
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Vincent Smith, et al., v. Meridian Transport, LLC, et al., Cause No. 25-CV-0664 (122d Dist. Ct., Galveston Cty., Tex.—Apr. 23, 2025)—Plaintiffs alleges gross negligence relating to a motor vehicle accident, and seek damages of up to $1,000,000, plus attorneys fees and costs of court. Defendants intend to vigorously contest the case.
Viva Wealth Fund I, LLC v. Vivakor, Inc., et al., Case No. 30-2025-01469418-CU-FR-WJC (Sup. Ct., Orange Cty., Cal.—Mar. 21, 2025)—Plaintiff alleges fraud, conversion, unfair competition, tortious interference in contractual relations, interference with prospective economic advantage, money had and received, breach of contract, constructive fraudulent transfer, among other counts, and seeks declaratory relief and damages in excess of $50 million relating to equipment purchased by Plaintiff and leased to Defendant VivaVentures Remediation Corporation. Defendants intend to vigorously contest the case.
Tyler Nelson v. Vivakor, Inc., et al., Case No. 30-2025-01503021-CU-OE-CJC (Sup. Ct. Orange Cty., Cal.—Aug. 11, 2025)—Plaintiff, former Chief Financial Officer of the Company, its subsidiary, and certain unnamed defendants for claims of breach of contract, breach of implied covenant in contract, and claims related to failure to pay wages, alleging total damages of $2,154,158.47, plus interest, attorneys fees, and costs of court. Defendants intend to vigorously contest the case.
SRAX, Inc. v. Vivakor, Inc., Case No. A-25-921524-F (8th Jud. Dist. Ct., Clark Cty., Nev.—Aug. 18, 2025)—Plaintiff filed an emergency ex parte application for an order immediately requiring transfer of 536,666 shares of Defendant’s common stock. Defendant intends to interplead in the proceeding on grounds that the predicate judgment obtained in Ventura County, California Superior Court was never properly served upon Defendant.
From time to time, we may become involved in various legal actions that arise in the normal course of business. We intend to defend vigorously against any future claims and litigation. We are not currently involved in any material disputes and do not have any material litigation matters pending.
ITEM 1A. RISK FACTORS
Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our most recent Annual Report on Form 10-K and in our other filings with the SEC, the occurrence of any one of which could have a material adverse effect on our actual results. There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K and our other filings with the SEC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following sets forth information regarding all unregistered securities sold by us in transactions that were exempt from the requirements of the Securities Act during the three months ended June 30, 2025. Except where noted, all of the securities discussed in this Item 2 were all issued in reliance on the exemption under Section 4(a)(2) of the Securities Act as the investors were sophisticated or accredited investors and familiar with our operations.
On April 11, 2025, we issued 300,000 shares of our restricted common stock to Cedarview Capital Management, LLC pursuant to a Side Letter, which securities contain a standard Rule 144 restrictive legend.
On April 11, 2025, we issued 350,000 shares of our restricted common stock to Justin Ellis pursuant to a conversion notice we received from Mr. Ellis notifying us of his desire to convert $350,000 owed to him under that certain Convertible Promissory Note dated July 7, 2024.
On April 11, 2025, we issued 107,789 shares of our Series A Preferred Stock to the sellers, or their assignees, in the Endeavor Entities transaction which had been accrued for at December 31, 2024. These shares represented the preferred stock portion of the purchase price for the transaction, including any post-closing adjustments. Of these shares, 84,931 shares went to Jorgan Development, LLC and 858 shares went to JBAH Holdings, LLC, both of which are controlled by James Ballengee, our Chief Executive Officer. The shares do have a 6% annual dividend, based on the $1,000 stated per share value of the Series A Preferred Stock, payable in shares of our common stock.
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On April 11, 2025, we issued an aggregate of 1,298,453 shares of our restricted common stock for four months of dividends to the holders of our Series A Preferred Stock. Of those shares, 884,037 were issued to Jorgan Development, LLC and 8,933 were issued to JBAH Holdings, LLC, both of which are controlled by James Ballengee, our Chief Executive Officer.
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. The issuance of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the holders are accredited investors and familiar with our operations.
On May 28, 2025, we issued a convertible promissory note (the “Note”), to a non-affiliated accredited investor (the “Holder”), in the aggregate principal amount of $172,500 in connection with a Securities Purchase Agreement entered into by and between the Company and certain Holders (the “SPA”). Under the terms of the SPA and the Note, we received $150,000, the Note matures twelve months from the date of issuance, has a 15% original issuance discount, has a one-time ten percent (10%) interest charge applied at the issuance date, and is 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 issuance of the Note, we will issue the Holder 12,500 shares of our common stock as additional incentive to enter into the SPA and the Note.
Between June 6, 2025 and June 9, 2025, we issued convertible promissory notes (the “Notes”), to seven non-affiliated accredited investors (the “Holders”), in the aggregate principal amount of $5,117,647.06 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 $4,350,000 prior to deducting placement agent fees of $391,500, Holders attorney’s fees of $20,000 and escrow fees of $5,000. The Notes matures 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 is 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 issuance of the Notes, we will issue the Holders 652,500 shares of our common stock as additional incentive to enter into the SPA and the Notes.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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ITEM 5. OTHER INFORMATION
On March 17, 2025, the Company issued a junior secured convertible promissory note (the “Note”) due as described below, to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000 (the “Principal Amount”), in connection with a Loan and Security Agreement entered into by and between the Company, its subsidiaries, and the Lender (the “Agreement”). The Company received $5,000,000, before deduction of closing fees (the “Loan”). 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 (the “Commitment Shares”).
On May 20, 2025, we issued an aggregate of 1,764,964 shares of our restricted common stock for three months of dividends 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.
Between May 14, 2025 and June 9, 2025, we issued convertible promissory notes (the “Notes”), to seven non-affiliated accredited investors (the “Holders”), in the aggregate principal amount of $5,911,764.73 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 $5,025,000 prior to deducting placement agent fees of $391,500, Holders attorney’s fees of $20,000 and escrow fees of $5,000. The Notes matures 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 is 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 issuance of the Notes, we issued the Holders 753,750 shares of our common stock as additional incentive to enter into the SPA and the Notes.
As stated above, on March 17, 2025, Vivakor, Inc. (the “Company”), issued a junior secured convertible promissory note (the “Initial Note”) to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000 (the “Principal Amount”), in relation to a Loan and Security Agreement by and between the Company, its subsidiaries, and the Lender (the “Loan Agreement”). The Company received $5,000,000, before fees. The Company received the funds on March 18, 2025. In relation to the Loan Agreement, the Company also entered into a Registration Rights Agreement with the Lender (the “RRA”), under which the Company was obligated to file a resale registration statement with the SEC registering any shares of its common stock issuable under the Note no later than sixty (60) days after closing.
On July 9, 2025, we entered into a Second Amendment to Loan Agreement and Registration Rights Agreement (the “Amendment”), and an Additional Junior Secured Convertible Note (the “Additional Note”, together with the Amendment, the “New Loan Documents”), under which we agreed to issue the Lender the Note in the principal amount of $5,940,000. Under the New Loan Documents, we will receive net proceeds of $971,025.65, with the remainder of the principal amount going to (a) a $176,000 origination fee, (b) an aggregate of $3,232,974.35 (the “Holdback Amounts”) representing (i) a $891,000 holdback amount to be applied to pay the first six Weekly Installment Payments when due under the Additional Note (hereinafter defined), (ii) $1,395,540.35 to be applied to pay the seven past due Weekly Installment Payments under the Initial Note, plus accrued interest thereon, and (iii) $946,434 to secure and cover the payment of the next six Weekly Installment Payments due under the Initial Note, (c) $20,000 to pay Lender’s legal fees, and (d) and original issuance discount of $1,540,000. The Note is payable over forty equal weekly installments of $148,500, which may be paid in cash or, at the option of the Company once an applicable registration statement is effective, 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 in default and is subject to mandatory prepayment upon the receipt of proceeds from identified sales of equity interests in the Company and/or the receipt of certain extraordinary cash payments. In the event we default on the terms of the Initial Note or the Additional Note, the conversion price under the notes is a 50% discount to 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 lender is secured by a junior lien in all assets of the Company, subject to exceptions for existing debt covenants of the Company. The Company reserved 15,000,000 shares of its common stock for issuance in connection with a conversion under the Additional Note and the Company agreed to issue the Lender 150,000 shares of its common stock as additional consideration for the loan (the “Commitment Shares”). We received the funds under the New Loan Documents on July 15, 2025.
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On July 9, 2025, we entered into a Forbearance and Amendment to Loan Agreement and Note, which amended the terms of the Loan Agreement, Initial Note and RRA (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement: (i) the Lender agreed to loan us an additional amount up to $4,400,000 under similar terms as the Initial Note (funds from which we received on July 15, 2025, as set forth below), (ii) the Lender agreed to permit us to raise an additional $3,000,000 under terms set forth on Exhibit I of the Loan Agreement, (iii) the filing date for the resale registration statement under the RRA was extended to July 18, 2025, (iv) the Outstanding Principal Amount of the Initial Note was $6,151,783 on the Forbearance Agreement Effective Date, (v) the principal amount under the Initial Note was increased to $6,766,961.30 (the “Amended Principal Amount”), representing 110% of the Outstanding Principal Amount of the Note as of the Forbearance Agreement Effective Date, (vi) the Weekly Installment Payments under the Initial Note stayed the same, (vii) the fee of $615,178.30 was added to the Amended Principal Amount of the Initial Note and shall be due and payable by the Company on or before January 7, 2026, (viii) past due interest totaling $291,367.35, that has accrued between the Forbearance Agreement Effective Date and the Effective Date, shall also be paid on or before January 7, 2026, and (ix) both the $615,178.30 fee and the $291,367.35 of past due interest shall be paid in full in cash on or before January 7, 2026.
On July 19, 2025, the Board of Directors of Vivakor received notice from Tyler Nelson, Vivakor’s Chief Financial Officer and Member of the Board of Directors of his resignation from such positions effective immediately.
On July 24, 2025, Vivakor Administration, LLC (the “Company”) entered into an executive employment agreement with Kimberly Hawley (the “Employment Agreement”) with respect to the her appointment as Executive Vice President, Chief Financial Officer, and Treasurer of the Company and Vivakor, Inc. (“Vivakor”). Pursuant to the Employment Agreement, Ms. Hawley will receive annual compensation of $350,000. Additionally, Ms. Hawley shall be eligible for performance bonus compensation as further set forth therein. The Employment Agreement may be terminated by either party for any or no reason, by providing five business days’ notice of termination, but a termination without cause will trigger certain severance provisions, including a lump sum payment equal to one (1) calendar year’s pay.
On July 30, 2025, Vivakor Transportation, LLC, as Seller, executed and entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Jorgan Development, LLC (“Jorgan”) to sell all of the issued and outstanding limited liability company membership interests in and to Meridian Equipment Leasing, LLC, and Equipment Transport, LLC (the “Targets”), two indirectly wholly-owned subsidiaries of Vivakor, Inc. (“Vivakor”, and the “Transaction”, respectively). The purchase price paid to the Seller thereunder consisted of $11,058,235 USD to be remitted in Series A Convertible Preferred Stock of Vivakor, which shares will no longer be considered outstanding or be entitled to the relevant annual dividend. The purchase price is subject to upward or downward adjustment based on any difference in net equity of the Targets as reflected by the Targets’ final financial results for the period ending June 30, 2025. The Targets were principally engaged in the truck transportation of oilfield produced water and associated equipment leasing operations. In connection with the Transaction, and among other agreements as further set forth in the Purchase Agreement, (i) affiliates of Vivakor, and certain related parties controlled directly or indirectly by James H. Ballengee, Vivakor’s Chairman, President, and Chief Executive Officer (the “Ballengee Family Office Affiliates”) will amend and restate that certain Transition Services Agreement dated October 1, 2024, to account for new and additional services to be provided by various parties thereto, (ii) the parties will amend and restate that certain Secured Promissory Note dated August 15, 2022, by and between Vivakor, as Borrower, and Jorgan Development, LLC, as Lender, reducing the payments to Lender thereunder by almost one-half (1/2), from ninety-nine percent (99%) of certain free cash flow from certain of Vivakor’s terminal operations to fifty percent (50%) of free cash flow from such operations, and (iii) Mr. Ballengee and certain Ballengee Family Office Affiliates will voluntarily suspend the right to receive dividends and distributions upon Series A Convertible Preferred Stock of Vivakor, held by them for the period from August 1, 2025 to January 1, 2026.
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On July 30, 2025, Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Silver Fuels Processing, LLC, CPE Gathering Midcon, LLC, Vivakor, and Vivakor Transportation, LLC (collectively, the “Vivakor Obligors”), James H. Ballengee, Vivakor’s Chairman, President, and Chief Executive Officer, and certain related parties controlled directly or indirectly by Mr. Ballengee (collectively, the “Ballengee Obligors”), executed and entered into a Forbearance Agreement with Maxus Capital Group, LLC (“Maxus” and the “Forbearance Agreement”, respectively). Pursuant to the terms of the Forbearance Agreement, the Vivakor Obligors and the Ballengee Obligors agreed that (A) various events of default have occurred and are continuing to occur with respect to (i) Master Agreement No. 1450 dated March 17, 2020, by and between Maxus Capital Group, LLC, as Lessor, Silver Fuels Delhi, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1450 Lease”), (ii) Master Agreement No. 1452 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, Meridian Equipment Leasing, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1452 Lease”), (iii) Master Agreement No. 1462 dated December 28, 2021, by and between Maxus Capital Group, LLC, as Lessor, White Claw Colorado City, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, and all Schedules and Leases made subject thereto (collectively, the “1462 Lease”, and together with the 1450 Lease and the 1452 Lease, the “Maxus Leases”), (B) Maxus will forbear and refrain from further action to enforce its rights under the Maxus Leases so long as no further events of default occur pursuant to the Forbearance Agreement, and (C) pursuant to the Maxus Leases, the Vivakor Obligors and Ballengee Obligors will pay or cause to be paid to Maxus the sum of $3,288,067.12 on or before September 1, 2025, the sum of $1,418,659.76 on or before October 1, 2025, the sum of $1,500,000 on or before November 30, 2025, the sum of $3,000,000 on or before November 30, 2025, the sum of $41,012.06 per month pursuant to the 1450 Lease, the sum of $592,973.77 per month pursuant to the 1452 Lease, and the sum of $188,030.95 per month pursuant to the 1462 Lease. Upon the execution of the Forbearance Agreement, the Vivakor Obligors and Ballengee Obligors must remit to Maxus a forbearance fee equal to (x) $250,000.00 cash and (b) restricted common shares of Vivakor in an amount equal to $250,000.00, priced per share based on the average closing price for the three (3) days preceding their issuance.
Pursuant to a Transition Agreement dated August 12, 2025, by and between Vivakor and Vivakor Administration, LLC, as Company, and Russ M. Shelton (the “Transition Agreement), Mr. Shelton, resigned his position as Executive Vice President and Chief Operating Officer of the Company, concurrent therewith and agreed to assist in transitioning his responsibilities to his replacement. Mr. Shelton’s resignation is not the result of any disagreement with Vivakor or its independent auditors regarding its accounting or financial practices.
On August 12, 2025, we entered into a Second Amendment to the Employment Agreement with Les Patterson, which amended that certain Employment Agreement dated July 1, 2025, as amended. Under the Amended Agreement, Mr. Patterson accepted the position of Vice President and Chief Operating Officer of Vivakor, Inc. in exchange for a base annual salary of $375,000 and annual equity compensation of shares of Vivakor’s common stock equal to not less than $125,000, paid to Mr. Patterson in four equal quarterly installments priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the Effective Date or annual anniversary of the Amended Agreement, as applicable, with the shares issued as registered common stock under a registered equity compensation plan. Mr. Patterson will also receive a one-time signing bonus of Two Hundred Fifty Thousand Dollars ($250,000.00) of Vivakor common stock.
On August 12, 2025, we issued a convertible promissory note (the “Note”), to a non-affiliated accredited investor (the “Holder”), in the aggregate principal amount of $647,500 in connection with a Securities Purchase Agreement entered into by and between Vivakor and the Holder (the “SPA”). The Note and SPA have similar terms to the Notes and SPA Vivakor entered into with 12 non-affiliated investors in May 2025. Under the terms of the SPA and the Note, we received $550,000, the Note matures twelve months from the date of issuance, has a 15% original issuance discount, has a one-time ten percent (10%) interest charge applied at the issuance date, and is convertible at eighty percent (80%) of the lower of (a) the closing price of the Vivakor’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 issuance of the Note, we will issue the Holder 82,500 shares of our common stock as additional incentive to enter into the SPA and the Note. The issuance of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the Holder is accredited investor and familiar with our operations.
This summary is not a complete description of all of the terms of the related agreements and are qualified in their entirety by reference to the full text of the documents, forms of which are filed as exhibits hereto and/or incorporated by reference into this disclosure from prior filings.
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ITEM 6. EXHIBITS
EXHIBIT INDEX
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| * | Management contract or compensatory plan or arrangement. |
| ** | These exhibits are being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| VIVAKOR, INC. | ||
| By: | /s/ James Ballengee | |
| James Ballengee | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| Date: | August 19, 2025 | |
| VIVAKOR, INC. | ||
| By: | /s/ Kimberly Hawley | |
| Kimberly Hawley | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| Date: | August 19, 2025 | |
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