UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________ to _________

Commission file number: 000-41286

VIVAKOR, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2178141
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

5220 Spring Valley Road, Suite LL20 Dallas, TX		75242
(Address of Principal Executive Offices)		(Zip Code)

(949) 281-2606

(Registrant’s telephone number, including area code)

4101 North Thanksgiving Way, Lehi UT 84043

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of exchange on which registered
Common Stock, $0.001 par value		VIVK		The Nasdaq Stock Market LLC (Nasdaq Capital Market)

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” a “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2023, there were 26,220,508 shares of the registrant’s common stock outstanding.

VIVAKOR, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		1

ITEM 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	1

	Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2023 and 2022 (unaudited)	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months ended September 30, 2023 and 2022 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2023 and 2022 (unaudited)	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	25

ITEM 4.	Controls and Procedures	26

PART II. OTHER INFORMATION		27

ITEM 1.	Legal Proceedings	27

ITEM 1A.	Risk Factors	27

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

ITEM 3.	Defaults Upon Senior Securities	28

ITEM 4.	Mine Safety Disclosures	28

ITEM 5.	Other Information	28

ITEM 6.	Exhibits	29

SIGNATURES		30

EXPLANATORY NOTE

On February 14, 2022, we effected a 1-for-30 reverse split of our authorized and outstanding shares of common stock (the “Reverse Stock Split”) via the filing of a certificate of change with the Nevada Secretary of State, which was filed simultaneously with the close of an underwritten public offering of our common stock and the commencement of the trading of our common stock on the Nasdaq Capital Market, LLC. As a result of the Reverse Stock Split, all authorized and outstanding common stock, preferred stock, and per share amounts in this Quarterly Report on Form 10-Q, including, but not limited to, the consolidated financial statements and footnotes included herein, have been adjusted to reflect the Reverse Stock Split for all periods presented.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIVAKOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,018,039		$	3,101,186
Cash and cash equivalents attributed to variable interest entity		181,058			81,607
Accounts receivable		3,831,930			2,615,354
Accounts receivable- related party		174,083			948,352
Prepaid expenses		67,345			31,523
Marketable securities		661,102			1,652,754
Inventories		63,680			47,180
Other assets		1,049,241			700,298
Total current assets		7,046,478			9,178,254

Other investments		4,000			4,000
Property and equipment, net		26,691,972			22,578,876
Right of use assets- operating leases		1,622,770			1,880,056
License agreements, net		1,675,406			1,772,153
Intellectual property, net		24,089,856			28,251,053
Goodwill		14,984,768			12,678,108
Total assets	$	76,115,250		$	76,342,500

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	6,093,010		$	3,242,667
Accounts payable and accrued expenses- related parties		3,799,730			4,142,978
Accrued compensation		1,246,579			1,302,890
Operating lease liabilities, current		535,960			471,991
Finance lease liabilities, current		963,900			963,900
Loans and notes payable, current		529,366			542,374
Loans and notes payable, current- related parties		12,554,172			342,830
Loans and notes payable, current attributed to variable interest entity		-			1,325,000
Loans and notes payable, current attributed to variable interest entity- related parties		300,000			599,500
Long-term debt (working interest royalty programs), current		7,902			9,363
Total current liabilities		26,030,619			12,943,493

Operating lease liabilities, long term		1,181,389			1,457,483
Finance lease liabilities, long term		1,998,967			2,298,960
Loans and notes payable, long term		1,867,721			406,246
Loans and notes payable, long term- related parties		15,330,729			27,977,704
Loans and notes payable attributed to variable interest entity- related party		1,351,845			300,000
Long-term debt (working interest royalty programs)		4,451,587			3,897,553
Total liabilities		52,212,857			49,281,439

Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 3,400,000 shares authorized, none outstanding
Common stock, $0.001 par value; 41,666,667 shares authorized; 18,219,582 and 18,064,838 were issued and outstanding as September 30, 2023 and December 31, 2022, respectively		18,220			18,065
Additional paid-in capital		75,973,993			74,026,163
Treasury stock, at cost		(20,000	)		(20,000	)
Accumulated deficit		(62,066,420	)		(55,169,781	)
Total Vivakor, Inc. stockholders’ equity		13,905,793			18,854,447
Noncontrolling interest		9,996,600			8,206,614
Total stockholders’ equity		23,902,393			27,061,061
Total liabilities and stockholders’ equity	$	76,115,250		$	76,342,500

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues
Product revenue - third parties	$	12,849,613		$	8,882,105		$	35,614,821		$	8,882,105
Product revenue - related party		3,463,793			2,883,870			9,834,095			2,883,870
Total revenues		16,313,406			11,765,975			45,448,916			11,765,975
Cost of revenues		14,766,494			10,553,375			41,174,082			10,553,375
Gross profit		1,546,912			1,212,600			4,274,834			1,212,600
Operating expenses:
Sales and marketing		1,240			50,174			2,457			360,765
General and administrative		1,473,728			2,373,615			4,710,852			6,609,175
Amortization and depreciation		817,058			1,119,737			2,269,445			2,053,550
Total operating expenses		2,292,026			3,543,526			6,982,754			9,023,490
Loss from operations		(745,114	)		(2,330,926	)		(2,707,920	)		(7,810,890	)
Other income (expense):
Unrealized gain (loss) on marketable securities		(661,101	)		1,074,290			(991,652	)		661,101
Gain on disposition of asset		-			-			-			2,456
Interest income		-			5,782			-			18,243
Interest expense		(516,357	)		(85,924	)		(1,426,730	)		(191,765	)
Interest expense- related parties		(828,739	)		(426,293	)		(2,387,523	)		(435,398	)
Other income		99,420			50			123,536			40,134
Total other income (expense)		(1,906,777	)		567,905			(4,682,369	)		94,771
Loss before provision for income taxes		(2,651,891	)		(1,763,021	)		(7,390,289	)		(7,716,119	)
Provision for income taxes		-			-			(800	)		(800	)
Consolidated net loss		(2,651,891	)		(1,763,021	)		(7,391,089	)		(7,716,919	)
Less: Net loss attributable to noncontrolling interests		(134,517	)		(183,008	)		(494,450	)		(630,706	)
Net loss attributable to Vivakor, Inc.	$	(2,517,374	)	$	(1,580,013	)	$	(6,896,639	)	$	(7,086,213	)

Basic and diluted net loss per share	$	(0.14	)	$	(0.09	)	$	(0.38	)	$	(0.46	)

Basic weighted average common shares outstanding		18,120,344			17,047,489			18,083,543			15,284,240

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


	Series A Preferred Stock				Common Stock				Additional Paid-in		Treasury			Accumulated			Non-controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Stock			Deficit			Interest			Equity
June 30, 2023 (unaudited)		-	$	-		18,064,838	$	18,065	$	74,493,672	$	(20,000	)	$	(59,549,046	)	$	8,575,445		$	23,518,136
Issuance of common stock for a reduction of liabilities		-		-		154,744		155		219,845		-			-			-			220,000
Distributions to noncontrolling interest		-		-		-		-		-		-			-			(414,328	)		(414,328	)
Issuance of noncontrolling interest for a reduction of debt		-		-		-		-		-		-			-			1,970,000			1,970,000
Stock based compensation		-		-		-		-		1,260,476		-			-			-			1,260,476
Net loss		-		-		-		-		-		-			(2,517,374	)		(134,517	)		(2,651,891	)
September 30, 2023 (unaudited)		-	$	-		18,219,582	$	18,220	$	75,973,993	$	(20,000	)	$	(62,066,420	)	$	9,996,600		$	23,902,393

	Series A Preferred Stock				Common Stock				Additional Paid-in		Treasury			Accumulated			Non-controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Stock			Deficit			Interest			Equity
December 31, 2022		-	$	-		18,064,838	$	18,065	$	74,026,163	$	(20,000	)	$	(55,169,781	)	$	8,206,614		$	27,061,061
Issuance of common stock for a reduction of liabilities		-		-		154,744		155		219,845		-			-			-			220,000
Distributions to noncontrolling interest		-		-		-		-		-		-			-			(1,020,564	)		(1,020,564	)
Issuance of noncontrolling interest for a reduction of debt		-		-		-		-		-		-			-			3,305,000			3,305,000
Non-qualified stock options issued to third party		-		-		-		-		467,509		-			-			-			467,509
Stock based compensation		-		-		-		-		1,260,476		-			-			-			1,260,476
Net loss		-		-		-		-		-		-			(6,896,639	)		(494,450	)		(7,391,089	)
September 30, 2023 (unaudited)		-	$	-		18,219,582	$	18,220	$	75,973,993	$	(20,000	)	$	(62,066,420	)	$	9,996,600		$	23,902,393

Series A
Preferred Stock