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, 2022

☐ 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.)

4101 North Thanksgiving Way

Lehi, UT

84043

(Address of Principal Executive Offices)

(Zip Code)

(949) 281-2606

(Registrant’s telephone number, including area code)

_____________________________________

(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 9, 2022, there were 18,064,838 shares of the registrant’s common stock outstanding.

VIVAKOR, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION		4

ITEM 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	4

	Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2022 and 2021 (unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months ended September 30, 2022 and 2021 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2022 and 2021 (unaudited)	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	36

ITEM 4.	Controls and Procedures	36

PART II. OTHER INFORMATION		37

ITEM 1.	Legal Proceedings	37

ITEM 1A.	Risk Factors	37

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

ITEM 3.	Defaults Upon Senior Securities	38

ITEM 4.	Mine Safety Disclosures	38

ITEM 5.	Other Information	38

ITEM 6.	Exhibits	38

SIGNATURES		41

EXPLANATORY NOTE

On February 14, 2022, we closed an underwritten public offering for 1,600,000 shares of common stock, at a public offering price of $5.00 per share, for aggregate gross proceeds of $8.0 million, prior to deducting underwriting discounts, commissions, and other offering expenses of approximately $1.8 million. 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 the underwritten public offering of our common stock and the commencement of the trading of our common stock on the Nasdaq Capital Market, LLC (see, Part II, Item 5 “Other Information”). 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,			December 31,
	2022			2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,373,926		$	1,293,767
Cash and cash equivalents attributed to variable interest entity		147,865			199,952
Accounts Receivable, less allowances of none and $33,000, respectively		5,524,133			845
Prepaid expenses		67,463			–
Marketable securities		2,892,319			2,231,218
Inventories		253,609			192,000
Precious metal concentrate		1,166,709			1,166,709
Other assets		784,998			73,245
Total current assets		15,211,022			5,157,736

Other investments		4,000			4,000
Notes receivable		1,156,526			1,194,235
Property and equipment, net		31,545,826			24,692,111
Rights of use assets- operating leases		648,201			663,291
License agreement, net		2,255,610			2,370,835
Intellectual property, net		37,422,454			13,662,037
Goodwill		6,562,028			–
Total assets	$	94,805,667		$	47,744,245

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	9,473,001		$	2,023,985
Operating lease liabilities, current		364,103			287,769
Finance lease liabilities, current		652,440			–
Loans and notes payable, current		971,441			1,511,447
Loans and notes payable, current attributed to variable interest entity		2,597,709			3,416,379
Long-term debt (working interest royalty programs), current		9,363			3,256
Total current liabilities		14,068,057			7,242,836

Operating lease liabilities, long term		338,532			434,109
Finance lease liabilities, long term		3,222,920			–
Loans and notes payable, long term		29,376,628			1,185,970
Long-term debt (working interest royalty programs)		4,968,740			6,171,298
Deferred income tax liabilities		5,156,899			5,156,899
Total liabilities		57,131,776			20,191,112

Stockholders' equity:
Convertible, preferred stock, $.001 par value; 3,400,000 shares authorized;⁽¹⁾Series A- 66,667 issued and outstanding⁽¹⁾		–			67
Common stock, $.001 par value; 41,666,667 shares authorized; 18,064,838 and 12,330,859 were issued and outstanding as of September 30, 2022 and December 31, 2021⁽¹⁾		18,065			12,331
Additional paid-in capital		73,304,687			58,279,590
Treasury stock, at cost		(20,000	)		(20,000	)
Accumulated deficit		(42,817,572	)		(35,731,359	)
Total Vivakor, Inc. stockholders' equity		30,485,180			22,540,629
Noncontrolling interest		7,188,711			5,012,504
Total stockholders' equity		37,673,891			27,553,133
Total liabilities and stockholders’ equity	$	94,805,667		$	47,744,245

____________________

(1)	Share and per share amounts have been retroactively adjusted to reflect the one-for-thirty reverse stock split effective February 14, 2022. See Note 1 – Organization and Basis of Presentation for additional information

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021

Revenues	$	11,765,975		$	965,757		$	11,765,975		$	1,082,757
Cost of revenues		10,553,375			938,226			10,553,375			1,050,676
Gross profit		1,212,600			27,531			1,212,600			32,081
Operating expenses:
Sales and marketing		50,174			11,329			360,765			839,769
General and administrative		2,373,615			1,057,710			6,609,175			3,367,104
Amortization and depreciation		1,119,737			364,509			2,053,550			1,092,423
Total operating expenses		3,543,526			1,433,548			9,023,490			5,299,296
Loss from operations		(2,330,926	)		(1,406,017	)		(7,810,890	)		(5,267,215	)
Other income (expense):
Unrealized gain (loss) on marketable securities		1,074,290			(2,481,175	)		661,101			1,253,100
Interest income		5,782			827			18,243			3,312
Interest expense		(512,217	)		(320,836	)		(627,163	)		(716,305	)
Gain on disposition asset		–			–			2,456			87,044
Other income		50			88,359			40,134			95,199
Total other income (expense)		567,905			(2,712,825	)		94,771			722,350
Loss before provision for income taxes		(1,763,021	)		(4,118,842	)		(7,716,119	)		(4,544,865	)
Provision for income taxes		–			723,911			(800	)		–
Consolidated net loss		(1,763,021	)		(3,394,931	)		(7,716,919	)		(4,544,865	)
Less: Net loss attributable to noncontrolling interests		(183,008	)		(485,679	)		(630,706	)		(1,741,523	)
Net loss attributable to Vivakor, Inc.		(1,580,013	)		(2,909,252	)	$	(7,086,213	)	$	(2,803,342	)

Net loss attributable to common shareholders	$	(1,580,013	)	$	(2,909,252	)	$	(7,086,213	)	$	(2,803,342	)
Dividend on preferred stock		–			–			–			42,196
Net income loss to parent	$	(1,580,013	)	$	(2,909,252	)	$	(7,086,213	)	$	(2,845,538	)

Basic and diluted net loss per share ⁽¹⁾	$	(0.09	)	$	(0.24	)	$	(0.46	)	$	(0.24	)

Basic weighted average common shares outstanding ⁽¹⁾		17,047,489			12,303,924			15,284,240			11,863,943

____________________

(1)	Share and per share amounts have been retroactively adjusted to reflect the one-for-thirty reverse stock split effective February 14, 2022. See Note 1 – Organization and Basis of Presentation for additional information

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, 2022 (unaudited)	–	$	–	15,038,619	$	15,039	$	67,857,646		$	(20,000	)	$	(41,237,559	)	$	7,245,917		$	33,861,043
Common Stock issued for stock awards	–		–	16,667		16		(16	)		–			–			–			–
Common stock issued as part consideration for the purchase of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC	–		–	3,009,552		3,010		4,284,645			–			–			–			4,287,655
Stock options issued for services	–		–	–		–		317,500			–			–			–			317,500
Stock based compensation	–		–	–		–		844,912			–			–			–			844,912
Distributions to noncontrolling interest	–		–	–		–		–			–			–			(249,198	)		(249,198	)
Issuance of noncontrolling interest for a reduction of debt	–		–	–		–		–			–			–			375,000			375,000
Net loss	–		–	–		–		–			–			(1,580,013	)		(183,008	)		(1,763,021	)
September 30, 2022 (unaudited)	–	$	–	18,064,838	$	18,065	$	73,304,687		$	(20,000	)	$	(42,817,572	)	$	7,188,711		$	37,673,891

	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, 2021 ⁽¹⁾	66,667		$	67		12,330,859	$	12,331	$	58,279,590		$	(20,000	)	$	(35,731,359	)	$	5,012,504		$	27,553,133
Common Stock issued for stock awards	–			–		16,667		16		(16	)											–
Common Stock issued for a reduction of liabilities	–			–		272,156		273		1,144,719			–			–			–			1,144,992
Conversion of Series A Preferred Stock to Common Stock	(66,667	)		(67	)	833,333		833		(766	)		–			–			–			–
Common Stock issued for cash	–			–		1,600,000		1,600		6,238,400			–			–			–			6,240,000
Common stock issued for fractional shares from reverse stock split	–			–		2,271		2		–			–			–			–			2
Common stock issued as part consideration for the purchase of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC	–			–		3,009,552		3,010		4,284,645			–			–			–			4,287,655
Stock options issued for services	–			–		–		–		1,172,500			–			–			–			1,172,500
Stock based compensation	–			–		–		–		2,185,615			–			–			–			2,185,615
Distributions to noncontrolling interest	–			–		–		–		–			–			–			(593,087	)		(593,087	)
Issuance of noncontrolling interest for a reduction of debt	–			–		–		–		–			–			–			3,400,000			3,400,000
Net loss	–			–		–		–		–			–			(7,086,213	)		(630,706	)		(7,716,919	)
September 30, 2022 (unaudited)	–		$	–		18,064,838	$	18,065	$	73,304,687		$	(20,000	)	$	(42,817,572	)	$	7,188,711		$	37,673,891

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, 2021⁽¹⁾	66,667	$	67	12,291,416	$	12,291	$	56,970,572	$	(20,000	)	$	(30,141,278	)	$	758,245		$	27,579,897
Common Stock issued for a reduction of liabilities⁽¹⁾	–		–	19,841		20		109,982		–			–			–			110,002
Stock options issued for services	–		–	–		–		427,500		–			–			–			427,500
Stock based compensation	–		–	–		–		111,528		–			–			–			111,528
Issuance of noncontrolling interest for a reduction of debt	–		–	–		–		–		–			–			1,985,001			1,985,001
Net income (loss)	–		–	–		–		–		–			(2,909,252	)		(485,679	)		(3,394,931	)
September 30, 2021 (unaudited)⁽¹⁾	66,667	$	67	12,311,257	$	12,311	$	57,619,582	$	(20,000	)	$	(33,050,530	)	$	2,257,567		$	26,818,997

Series A Preferred Stock

Common Stock

Additional Paid-in

Treasury

Accumulated

Non-controlling

Total Stockholders'

Amount

Capital

SEC Form 10-Q filed by Vivakor Inc.