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) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(
(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 | ||
| The (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.
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).
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 | ☐ |
| ☒ | 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 ☐
As of August 18, 2026, there were shares of the registrant’s common stock outstanding.
EXPLANATORY NOTE
In this Quarterly Report on Form 10-Q, unless the context otherwise requires, all references to “the Company,” “we,” “our”, “us” and “Vivakor” refer to Vivakor, Inc., a Nevada corporation.
At the commencement of trading on March 24, 2026 and July 17, 2026, respectively, we completed 1-for-200 and 1-for-20 reverse splits of our outstanding shares of common stock (the “Reverse Stock Splits”) of our quoted common stock. No fractional shares of the Company’s common stock were issued as a result of the Reverse Stock Splits. Any fractional shares resulting from the Reverse Stock Splits were rounded up to the nearest whole share. Unless otherwise noted, the share and per share information in this Quarterly Report on Form 10-Q has been adjusted to reflect the Reverse Stock Splits, including the financial statements and notes thereto.
VIVAKOR, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VIVAKOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 |
December 31, 2025 |
|||||||
| (Unaudited) | ||||||||
| 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 | ||||||||
| 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 | ||||||||
| Derivative liabilities | ||||||||
| Other liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, long term | ||||||||
| Loans and notes payable, long term | ||||||||
| Loans and notes payable, long term - related parties | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $par value; shares authorized, outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Common stock, $ par value; shares authorized; and were issued and outstanding as of June 30, 2026 and Dec 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost | ( |
) | ( |
) | ||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Vivakor, Inc. stockholders’ equity | ||||||||
| Noncontrolling interest | ( |
) | ( |
) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements
1
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Revenues - related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( |
) | ( |
) | ( |
) | ||||||||||
| Other income (expense): | ||||||||||||||||
| Unrealized gain on marketable securities | ( |
) | ( |
) | ||||||||||||
| Gain (loss) on disposition of assets | ( |
) | ||||||||||||||
| Gain on conversion of debt | ||||||||||||||||
| 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 | ||||||||||||||||
See accompanying notes to condensed consolidated financial statements
2
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Series A Preferred Stock |
Common Stock | Additional Paid-in |
Treasury | Accumulated | Non-controlling | Total Stockholders’ |
||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Stock | Deficit | Interest | Equity | ||||||||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||
| Issuance of common stock for cash, net of offering costs | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for a reduction of liabilities | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for legal settlement | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||
| Stock based compensation - consultant | ||||||||||||||||||||||||||||||||||||
| Common stock issued - Series A Preferred Stock Dividends | ( |
) | ||||||||||||||||||||||||||||||||||
| Common stock distributable - Series A Preferred Stock Dividends | - | ( |
) | |||||||||||||||||||||||||||||||||
| Shares issued with debt | - | |||||||||||||||||||||||||||||||||||
| Shares issued with debt conversion | ||||||||||||||||||||||||||||||||||||
| Consideration received for divestiture | ( |
) | ( |
) | - | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Excess of consideration for divestiture over net assets transferred | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| January 1, 2026 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||
| Impact of stock split including issuances for fractional shares | - | ( |
) | |||||||||||||||||||||||||||||||||
| Gain on forgiveness of convertible note payable to CEO | - | - | ||||||||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||||||
| Stock based compensation - consultant | ||||||||||||||||||||||||||||||||||||
| Common stock issued - Series A Preferred Stock Dividends | ( |
) | ||||||||||||||||||||||||||||||||||
| Common stock distributable - Series A Preferred Stock Dividends | - | ( |
) | |||||||||||||||||||||||||||||||||
| Shares issued with debt forbearance agreement | - | |||||||||||||||||||||||||||||||||||
| Shares issued with debt conversion | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| June 30, 2026 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements
3
VIVAKOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended | ||||||||
| June 30, 2026 |
June 30, 2025 |
|||||||
| OPERATING ACTIVITIES: | ||||||||
| Consolidated net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization and depreciation | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation - consultant | ||||||||
| Unrealized (gain) loss on marketable securities | ( |
) | ||||||
| Loss on disposition of assets | ||||||||
| Gain on conversion of debt | ( |
) | ||||||
| Noncash interest charges | ||||||||
| Interest on notes receivable | ( |
) | ( |
) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ( |
) | ||||
| Prepaid expenses | ( |
) | ||||||
| Inventories | ||||||||
| Right of use assets - operating leases | ||||||||
| Other assets | ( |
) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued compensation | ||||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Net cash provided by (used in) operating activities | ( |
) | ( |
) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of property and equipment | ||||||||
| Investment in joint venture | ( |
) | ||||||
| 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 (used in) financing activities | ||||||||
| Net increase (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 | ||||||||
| Notes payable settled against working capital items for netting arrangement | ||||||||
| Series A preferred shareholder stock dividends | ||||||||
| Common stock issued with debt | ||||||||
| Common stock issued for a reduction in liabilities | ||||||||
| Common stock issued on conversion of debt | ||||||||
See accompanying notes to condensed consolidated financial statements
4
VIVAKOR, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Description of Business
Vivakor, Inc. (collectively “we”, “us,” “our,” “Vivakor,” or the “Company”) is an integrated provider of midstream services and environmental solutions within the oil and gas industry. The Company owns and operates a diversified portfolio of midstream infrastructure assets located in several of the nation’s oil-producing basins, complemented by related environmental service offerings.
The Company conducts its operations through three primary business segments: transportation and logistics, terminaling and storage services, and supply and trading. The transportation and logistics segment includes crude oil gathering and transportation assets, including pipeline and trucking operations in the Permian and Anadarko Basins. The terminaling and storage services segment consists of crude oil terminal facilities located in Colorado City, Texas and Delhi, Louisiana. The supply and trading segment purchases and markets crude oil, condensate, and related hydrocarbon products.
The Company is also developing an environmental services business through the planned deployment of Remediation Processing Centers (“RPCs”), which are designed to recover hydrocarbons from contaminated soils and related waste streams. The RPC is under construction in Harris County, Texas.
On October 1, 2024, the Company acquired certain entities (the “Endeavor Entities”), expanding its midstream operations. During 2025, the Company completed the sale of certain non-core assets acquired in this transaction as part of a strategic review. On July 30, 2025, the Company sold certain non-core business units of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, both subsidiaries included with the Endeavor Entities, in order to streamline operations and focus on core midstream transportation, terminaling, and environmental processing activities. See Note 4 – Business Combination and Divestiture of Wholly Owned Subsidiaries for additional information.
Note 2. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the interim periods presented.
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full fiscal year.
5
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.
Change in Estimated Useful Lives
During the six months ended June 30, 2026, the Company reassessed the estimated useful lives of certain property and equipment based on operational experience, expected usage, and updated maintenance and replacement assumptions. As a result, the Company revised the estimated useful lives of certain assets on a prospective basis effective January 1, 2026.
The change in estimate was accounted for prospectively in accordance with ASC 250, Accounting Changes and Error Corrections. The effect of the change was to decrease depreciation expense by approximately $
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from the sale of crude oil and related petroleum products is recognized at a point in time when control transfers to the customer, generally upon delivery. Revenue from terminaling, storage, pipeline throughput, and transportation services is recognized over time as services are performed.
Segment Reporting
The Company operates through three reportable business segments: (i) Transportation and Logistics, (ii) Terminaling and Storage, and (iii) Supply and Trading.
Related Party Revenues
Revenue from related parties was $
The Company generates revenue from related parties through the sale of crude oil and related products, as well as the provision of terminaling, storage, pipeline throughput, and transportation logistics services under long-term contracts.
The Company evaluates collectability of related party receivables in a manner consistent with other customers.
Major Customers and Concentration of Credit Risk
During the three and six months ended June 30, 2026, three customers, including one related party, accounted for approximately
During the three and six months ended June 30, 2025, one customer, a related party, accounted for approximately
6
Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
All share and per share amounts have been retroactively adjusted to reflect the reverse stock splits effected in March 2026 and July 2026.
Potentially dilutive securities are excluded from the computation of diluted net income (loss) per share when their effect would be antidilutive. Potentially dilutive securities include convertible notes, warrants, and stock options.
Note 3. Going Concern & Liquidity
The Company has historically incurred
net losses and experienced negative cash flows from operations and, as of June 30, 2026, had an accumulated deficit of approximately
$215 million. As of June 30, 2026, the Company had a working capital deficit of approximately $
During the six months ended June 30, 2026, the Company continued executing its strategic plan focused on optimizing its midstream transportation, terminaling, and environmental processing operations, including the integration and operation of the Endeavor Entities acquired in the fourth quarter of 2024. The Company has historically financed its operations through a combination of operating cash flows, debt financings, and private and public equity offerings. The Company also entered into a financing arrangement with two institutional investors, with RBW Capital Partners LLC acting as placement agent, intended to support working capital and ongoing operations.
Based on the above, we believe there is substantial doubt about the Company’s ability to continue as a going concern. The Company has prepared the consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity. Management cannot provide any assurance that the Company will be able to execute its plans to raise additional capital, close its merger and acquisitions, or that its operations or business plan will be profitable.
Note 4. Business Combination, Divestiture of Wholly Owned Subsidiaries and Joint Venture
On October 1, 2024, the Company acquired all of the issued and outstanding membership interests of Endeavor Crude, LLC, Equipment Transport, LLC, Meridian Equipment Leasing, LLC, and Silver Fuels Processing, LLC (collectively, the “Endeavor Entities”).
On July 30, 2025, the Company completed the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC (together, the “Divested Entities”), two indirectly wholly owned subsidiaries acquired as part of the Endeavor Entities, pursuant to a Membership Interest Purchase Agreement entered into with Jorgan Development, LLC, an entity controlled by James Ballengee, the Company’s Chief Executive Officer and Chairman.
Effective June 2, 2026, the Company entered into a joint venture agreement with Monarch R&P Management LLC for a 50% interest in Monarch Remediation & Processing LLC (“Monarch”) for future operations associated with operating a wash plant and remediation processing centers. As of June 30, 2026, the Company has contributed $
7
Note 5. Accounts Receivable
Accounts receivable primarily consist of trade receivables related to crude oil sales and transportation services and are recorded net of an allowance for expected credit losses. The Company evaluates the collectability of accounts receivable on an ongoing basis based on historical experience, customer creditworthiness, and current economic conditions. The allowance for expected credit losses is reviewed on a periodic basis, and balances are written off when deemed uncollectible.
During the six months ended June 30, 2026, the Company recorded an allowance for expected credit losses related to certain customer receivable balances based on management’s assessment of collectability and current economic conditions.
Accounts receivable consisted of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Trade accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( |
) | ||||||
| Accounts receivable, net | $ | $ | ||||||
| Related party receivables | $ | $ | ||||||
The balance of related-party receivables is due from entities affiliated with the Company’s Chief Executive Officer. During the three and six months ended June 30, 2026, amounts due under related-party commercial agreements were offset against amounts payable to Jorgan Development, LLC pursuant to existing offset arrangements between the parties. As a result of such offsets and related activity, the Company’s net position with the affiliated entities transitioned from a payable position to a receivable position during the six months ended June 30, 2026. As of June 30, 2026, related-party receivables totaled approximately $
Note 6. Marketable Securities
The Company holds shares of common stock of Adapti, Inc. (“Adapti”), an entity affiliated with the Company’s Chief Executive Officer. The investment is classified as a marketable equity security and is measured at fair value using quoted market prices, with changes in fair value recognized in earnings.
The carrying value of marketable securities consisted of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Investment in Adapti | $ | $ | ||||||
| Unrealized loss | ( |
) | ( |
) | ||||
| Marketable Securities, net | $ | $ | ||||||
The Company recognized unrealized gains related to marketable securities of $
8
Note 7. Property and Equipment
Property and equipment consisted of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Vehicles and trailers | $ | $ | ||||||
| Equipment | ||||||||
| Land | ||||||||
| Crude & NGL Terminal and Related Equipment | ||||||||
| Crude Oil Transfer Stations | ||||||||
| Pipeline and Related Facilities | ||||||||
| Tank Expansion | ||||||||
| Construction in process | ||||||||
| Less: Accumulated depreciation | ( |
) | ( |
) | ||||
| $ | $ | |||||||
Depreciation expense for the three and six months ended June 30, 2026 was $
The decrease in depreciation expense during the six-month 2026 period was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, as well as revisions to the estimated useful lives of certain property and equipment based on operational experience and expected usage. The change in estimate was accounted for prospectively and resulted in a decrease in depreciation expense of approximately $
Construction in process primarily relates to the Company’s remediation processing systems, wash plant facilities, and terminal expansion projects.
Note 8. Intangible Assets
Intangible assets consisted of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Intangible assets, gross | $ | $ | ||||||
| Accumulated amortization | ( |
) | ( |
) | ||||
| Intangible assets, net | $ | $ | ||||||
9
Customer relationship intangible assets consisted of the following:
| Customer relationships, gross | $ | $ | ||||||
| Accumulated amortization | ( |
) | ( |
) | ||||
| Customer relationships, net | $ | $ |
Amortization expense was $
The Company evaluates long-lived assets and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable.
Goodwill was fully impaired during the year ended December 31, 2025. Accordingly, the Company had
Note 9. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest (various notes and loans payable) | ||||||||
| Accrued tax penalties and interest | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
Related-party accounts payable and accrued expenses consisted of the following:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Accounts payable - related parties | $ | $ | ||||||
| Accrued interest (notes payable) - related parties | ||||||||
| Accounts payable and accrued expenses - related parties | $ | $ | ||||||
Accounts payable primarily consist of trade payables and operating accruals incurred in the ordinary course of business.
10
Note 10. Unearned Revenue
As of June 30, 2026 and December 31, 2025, the Company had approximately $
Note 11. Loans and Notes Payable
Third party debt:
|
June 30, 2026 |
December 31, 2025 |
|||||||
| Various promissory notes and convertible notes | $ | $ | ||||||
| Blue Ridge Bank | ||||||||
| Small Business Administration | ||||||||
| Al Dali Intl for Gen. Trading & Cont. Co. | ||||||||
| RSF, LLC | ||||||||
| Cedarview Opportunities Master Fund LP | ||||||||
| Curve Capital, LLC | ||||||||
| ClearThink Capital Partners, LLC | ||||||||
| ClearThink Capital Partners, LLC (RBW) | ||||||||
| Agile Capital Funding, LLC | ||||||||
| JJ Astor | ||||||||
| Total notes payable | $ | $ | ||||||
| Loans and notes payable, current | $ | $ | ||||||
| Loans and notes payable, long term | $ | $ | ||||||
Related party debt:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Jorgan Development, LLC | $ | $ | ||||||
| Matt Nicosia | ||||||||
| James Ballengee Companies | ||||||||
| Meridian Equipment Leasing, LLC | ||||||||
| Triple T Trading Company LLC | ||||||||
| Total notes payable - related parties | $ | $ | ||||||
| Loans and notes payable, current - related parties | $ | $ | ||||||
| Loans and notes payable, long term - related parties | $ | $ | ||||||
11
Maturity Table
| 2026 | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total long-term debt | ||||||||
| Less: unamortized OID: | ( |
) | ( |
) | ||||
| Net debt | $ | $ |
ClearThink Partners, LLC — On January 9, 2026, the Company issued a promissory note to ClearThink Capital Partners LLC in the principal amount of $
ClearThink Capital Partners, LLC/RBW Investors — During 2025, the Company entered into multiple twelve-month convertible promissory notes with investors introduced to us by ClearThink Capital Partners, LLC and RBW totaling approximately $
On May 8, 2026, the Company closed the initial tranche of a securities purchase agreement with certain institutional investors pursuant to which the Company issued promissory notes with aggregate gross proceeds of up to $12.0 million, to be funded in two tranches (the “May 2026 Financing Transaction”). The initial closing provided gross proceeds of $6.0 million before placement agent fees and offering expenses. If fully funded, the notes will have an aggregate principal amount of $
William Tuorto — During the six months ending June 30, 2026, the Company entered into a short-term funding arrangement totaling $
JJ Astor & Co. — During 2025, the Company entered into multiple financing and forbearance arrangements with J.J. Astor & Co. related to secured promissory notes issued by the Company. As of December 31, 2025, the Second Note remained outstanding. On February 27, 2026, the Company entered into additional amendment and forbearance agreements with J.J. Astor & Co., which modified repayment terms, extended certain maturity dates, and provided for additional financing. The Company issued an additional secured promissory note in the principal amount of $
12
Jorgan Development, LLC — During the three and six months ended June 30, 2026, $-
As of June 30, 2026, the Company had outstanding secured notes payable to Cedarview Opportunities Master Fund LP of $
Note 12. Other Current Liabilities
Certain conversion features embedded within the Company’s convertible debt instruments contain variable settlement provisions and are accounted for as derivative liabilities in accordance with ASC 815, Derivatives and Hedging. As of June 30, 2026 and December 31, 2025, the Company had outstanding balances of $
As of June 30, 2026 and December 31, 2025, the Company had outstanding balances of $
Note 13. Commitments and Contingencies
Finance Leases
The Company has finance lease arrangements related primarily to storage, terminaling, and transportation equipment. Certain finance lease obligations are subject to forbearance arrangements and revised payment terms.
As of June 30, 2026 and December 31, 2025, respectively, finance lease liabilities consisted of the following:
| Description | June 30, 2026 |
December 31, 2025 |
||||||
| Principal portion of finance lease obligations | $ | $ | ||||||
| Accrued interest | $ | $ | ||||||
| Total finance lease liabilities (current) | $ | $ | ||||||
Operating Leases
The Company leases office space, land, trucking yards, and equipment under non-cancelable operating lease agreements with remaining lease terms ranging from less than one year to approximately two years. The right-of-use assets for operating leases as of June 30, 2026 and December 31, 2025 were $
13
Operating lease liabilities consisted of the following:
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total undiscounted lease payments | ||||
| Less: Imputed interest | ( |
) | ||
| Present value of lease payments | ||||
| Operating lease liabilities, current | ||||
| Operating lease liabilities, long-term | ||||
| Operating lease liability | ||||
| Weighted-average remaining lease term (mo.) | ||||
| Weighted-average discount rate | % |
Note 14. Stockholders’ Equity
Series A Preferred Stock
The Company’s Series A Preferred Stock has a stated value of $ per share, carries a cumulative dividend of
Pursuant to the Debt Satisfaction and Preferred Stock Amendment Agreement dated November 25, 2025, dividends on the Company’s Series A Convertible Preferred Stock were suspended from April 30, 2026 through April 29, 2027 in connection with amendments to the preferred stock terms and the satisfaction of certain outstanding convertible indebtedness. Subsequent to June 30, 2026, on July 7, 2026, the Company amended the agreement to reinstate the 6% Series A Preferred Stock dividend through April 29, 2027 in exchange for the extinguishment of $
Common Stock
The Company has authorized shares of common stock, par value $ per share.
All share and per share amounts presented in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the Company’s
14
The Company maintains the 2023 Equity and Incentive Plan (the “2023 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, restricted stock units, and other equity-based awards to employees, directors, consultants, and service providers.
During the three and six months ended June 30, 2026, the Company issued an aggregate of and , respectively, shares of common stock as stock-based compensation to employees, directors and consultants. During the three and six months ended June 30, 2025, the Company issued an aggregate of and , respectively, shares of common stock as stock-based compensation to employees, directors and consultants. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $ and $, respectively. For the three and six months ended June 30, 2026, the Company recognized consulting stock-based compensation expense of $ and $, respectively. For the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $ and $, respectively. For the three and six months ended June 30, 2025, the Company recognized consulting stock-based compensation expense of $ and $, respectively.
There were other options or awards granted during the three and six months ended June 30, 2026. The following table summarizes all stock option activity of the Company for the six months ended June 30, 2026 and 2025:
| Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
||||||||||
| Outstanding, December 31, 2025 | $ | |||||||||||
|
Granted |
- | |||||||||||
|
Exercised |
- | |||||||||||
| Forfeited | - | |||||||||||
| Outstanding, June 30, 2026 | $ | |||||||||||
|
Outstanding, December 31, 2024 |
$ | |||||||||||
| Granted | - | |||||||||||
|
Exercised |
- | |||||||||||
| Forfeited | - | |||||||||||
| Outstanding, June 30, 2025 | $ | |||||||||||
The Company maintains the 2025 Equity and Incentive Plan (the “2025 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, restricted stock units, and other equity-based awards to employees, directors, consultants, and service providers. No awards have been granted under the 2025 Plan.
15
Note 16. Segments
The Company conducts its operations through three reportable segments: (i) transportation and logistics services, (ii) terminaling and storage services, and (iii) supply and trading. The Company’s Chief Executive Officer, who serves as chief operating decision maker (“CODM”), evaluates segment performance based on gross profit.
Three Months Ended June 30, 2026:
|
Transportation and Logistics |
Terminaling and Storage |
Supply and Trading Segment |
Total Consolidated |
|||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Revenues - related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
Six Months Ended June 30, 2026:
|
Transportation and Logistics |
Terminaling and Storage |
Supply and Trading Segment |
Total Consolidated |
|||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Revenues - related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, 2025:
|
Transportation |
Terminaling |
Supply |
Total |
|||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Revenues - related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
Six Months Ended June 30, 2025:
|
Transportation |
Terminaling |
Supply |
Total |
|||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Revenues - related party | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
16
Note 17. Income Tax
The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes. ASC 740 requires companies to estimate the annual effective tax rate for current year ordinary income. In calculating the effective tax rate, permanent differences between financial reporting and taxable income are factored into the calculation, and temporary differences are not. The estimated annual effective tax rate represents the Company’s estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision.
The Company recorded a provision for income
taxes of $
Note 18. Related Party Transactions
The Company engages in transactions with entities affiliated with James Ballengee, the Company’s Chief Executive Officer and principal shareholder, in the ordinary course of business. The Company is party to various commercial agreements with White Claw Crude, LLC (“WC Crude”), Jorgan Development, LLC (“Jorgan”), and other affiliated entities, including storage, throughput, transportation, and supply agreements.
Revenue from related parties was $
As of June 30, 2026 and December 31, 2025, accounts receivable from related parties were approximately $10.7 million and $1.4 million, respectively. During the six months ended June 30, 2026, amounts due under related-party commercial agreements were offset against amounts payable to Jorgan pursuant to existing offset arrangements between the parties.
The Company also has certain debt and lease arrangements with entities affiliated with its Chief Executive Officer, as further described elsewhere in these condensed consolidated financial statements.
Note 19. Subsequent Events
The Company has evaluated subsequent events through the date the financial statements were available to issue.
On July 7, 2026, the Company agreed to issue an aggregate of shares of restricted common stock for dividends owed on our Series A Preferred Stock for April 30, 2026, July 31, 2026, and October 31, 2026 to the holders of the Series A Preferred Stock. Of those shares, an aggregate of
On July 10, 2026, the Company filed an amendment to its Articles of Incorporation to effect a
17
On July 16, 2026, the Company closed the second tranche of the May 2026 Financing Transaction, receiving $
On July 21, 2026 and August 3, 2026 the Company received a Notice of Conversion from ClearThink Capital Partners converting an aggregate of $
Between July 21, 2026 and August 10, 2026, the Company received Notices of Conversion from several of the ClearThink Capital Partners, LLC/RBW transaction investors converting $
Between July 21, 2026 and August 10, 2026, the Company received Notices of Conversion from J.J. Astor converting an aggregate of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
Business Overview
Vivakor, Inc. (“Vivakor” or the “Company”) is an integrated provider of midstream services and environmental solutions within the oil and gas industry. The Company operates through three reportable segments: transportation and logistics, terminaling and storage services, and supply and trading. These segments support the movement, storage, and marketing of crude oil and related hydrocarbon products across key oil producing regions, including the Permian Basin and mid-continent regions.
The Company’s transportation and logistics segment includes trucking and pipeline transportation operations, including the Omega Gathering Pipeline in Blaine County, Oklahoma, which serves as a direct connect to the Plains STACK Pipeline and provides access to the Cushing, Oklahoma storage hub. The terminaling and storage segment includes crude oil storage and blending facilities in Colorado City, Texas and Delhi, Louisiana. The supply and trading segment purchases, aggregates, markets, and resells crude oil, condensate, natural gas liquids, and related hydrocarbon products.
The Company is also developing an environmental services business through the planned deployment of Remediation Processing Centers (“RPCs”), are designed to recover hydrocarbons from oil contaminated soils and related waste streams. The deployment plan begins with the construction of a RPC in Harris County, Texas, currently scheduled to commission in the third quarter of 2026.
On October 1, 2024, the Company acquired certain entities (the “Endeavor Entities”), expanding its midstream operations. During 2025, the Company completed the sale of certain non-core assets acquired in this transaction as part of a strategic review. On July 30, 2025, the Company sold certain non-core business units of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, both subsidiaries included with the Endeavor Entities, in order to streamline operations and focus on core midstream transportation, terminaling, and environmental processing activities.
During the first quarter of 2026 and subsequent thereto, the Company continued to pursue additional financing transactions and capital restructuring initiatives intended to support working capital requirements, reduce indebtedness, and support ongoing operations and strategic growth initiatives.
Recent Developments
March 2026 Reverse Stock Split
On March 24, 2026, the Company effected a 1-for-200 reverse stock split of its common stock pursuant to a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation following shareholder approval obtained at the Company’s Special Meeting held on December 22, 2025.
July 2026 Reverse Stock Split
On July 17, 2026, the Company effected a 1-for-20 reverse stock split of its common stock pursuant to a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation filed with the State of Nevada on July 10, 2026, following shareholder approval obtained at the Company’s Annual Meeting held on June 30, 2026.
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Private Financing Transaction (the “Financing”)
Convertible Promissory Notes
The following summary of the Notes does not purport to be complete and is qualified in its entirety by reference to the forms of SPA and Notes filed as exhibits to the registration statement of which this prospectus forms a part.
On May 8, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors providing for the issuance of convertible promissory notes (the “Notes”) with aggregate gross proceeds to the Company of up to $12.0 million, before fees and expenses, in two closings. The Notes have an aggregate principal amount of $15.0 million, reflecting a $3.0 million original issue discount of 20%.
The initial closing occurred on May 8, 2026, pursuant to which the Company received $6.0 million in gross proceeds. A second closing for an additional $6.0 million remains subject to the effectiveness of the registration statement of which this prospectus forms a part and other customary closing conditions pursuant to the terms of the SPA and the Note.
The Notes are convertible into shares of the Company’s Common Stock at a conversion price equal to the greater of $0.37 per share and 80% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the five trading days immediately preceding conversion.
Conversions under the Notes are generally subject to a 4.99% beneficial ownership limitation, which may be waived upon notice by the applicable holder. In addition, absent shareholder approval, conversions are limited to the extent necessary to comply with Nasdaq’s 19.99% issuance limitation.
The Notes contain customary events of default, including payment and covenant defaults, which may result in acceleration of amounts due under the notes and certain additional default-related remedies, including an increase in the outstanding principal amount upon the occurrence of certain events of default.
The Company agreed to register for resale shares issuable upon conversion of the Notes, and this prospectus forms part of the related registration statement.
The Company intends to use proceeds from the Financing for working capital, debt reduction, and general corporate purposes.
RBW Capital Partners LLC, a division of Dawson James Securities, Inc., acted as placement agent in connection with the Financing.
Standby Equity Purchase Agreement
The following summary of the Standby Equity Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the form of the Standby Equity Purchase Agreement filed as an exhibit to the registration statement of which this prospectus forms a part.
On May 8, 2026, the Company entered into a standby equity purchase agreement (the “SEPA”) with an institutional investor (the “SEPA Investor”) providing for the potential purchase by the SEPA Investor of up to $100 million of the Company’s common stock over a 36-month period, subject to the terms and conditions of the SEPA.
Under the SEPA, the Company may, at its discretion, direct the SEPA Investor to purchase shares of common stock from time to time, subject to specified volume limitations, pricing formulas, and beneficial ownership limitations set forth in the agreement. Shares issued under the SEPA will generally be purchased at a discount to prevailing market prices.
20
The Company controls the timing and amount of any sales under the SEPA, subject to the terms and limitations contained in the agreement. Actual sales under the SEPA will depend on a variety of factors, including market conditions, trading prices of the Company’s common stock, and the Company’s capital needs.
The Company is required to file a separate registration statement covering shares issuable under the SEPA before any sales may occur under the agreement.
Reclassifications
Certain reclassifications have been made to prior years’ amounts to conform to the 2025 presentation, including adjustments related to the purchase price allocation of accrued interest and principal note payable amounts to conform to the 2025 presentation.
Change in Segment Reporting
Beginning in the third quarter of 2025, the Company revised its segment reporting structure to more closely align with how the chief operating decision maker assesses performance and allocates resources across the business. The Company now reports three operating and reportable segments: transportation and logistics, terminaling and storage services, and supply and trading. Revenues generated from supply and trading were previously reported under Terminaling and Storage and Transportation and Logistics in the first two quarters of 2025.
The Company’s chief operating decision maker evaluates segment performance primarily based on segment gross profit. Prior-period segment information has been recast, where applicable, to conform to the current presentation.
Concurrent with this change, we no longer report “Corporate and Other” as a separate category, as these activities do not represent an operating segment and are not separately reviewed by our chief operating decision maker. Corporate expenses, including executive and shared services personnel, stock-based compensation, professional fees, and other overhead costs, are now allocated to the operating segments or reflected in consolidated results, as appropriate.
Results of Consolidated Operations for the three months ended June 30, 2026 and 2025
Revenue
For the three months ended June 30, 2026 and 2025, revenues were $32,117,206 and $29,099,446, respectively, representing an increase of $3,017,760, or 10.37%. The increase in revenue was primarily attributable to the expansion of the Company’s crude oil supply and trading activities, which generated $26.5 million of revenue during the 2026 period. This increase was partially offset by lower revenues from the Company’s transportation and logistics and terminaling and storage segments as the Company continued to implement commercial strategies that integrate physical crude oil transportation, terminaling and related logistics services with its expanding supply, marketing and trading activities.
Revenue from transportation and terminaling services is generally recognized as the services are performed, while revenue from crude oil sales is generally recognized when control of the crude oil transfers to the customer. The Company’s earnings and cash flows from its midstream business operations are primarily affected by market conditions, commodity price fluctuations, and crude oil production levels within the Company’s operating regions, which influence throughput volumes, transportation activity, storage utilization, and trading margins.
Cost of Revenue
For the three months ended June 30, 2026 and 2025, cost of revenues was $25,482,907 and $24,519,777, respectively, representing an increase of $963,130, or 3.93%. The increase was primarily attributable to the expansion of the Company’s crude oil supply and trading activities, partially offset by lower costs associated with the Company’s transportation and logistics and terminaling and storage segments.
Cost of revenues primarily comprises costs associated with the Company’s transportation and logistics operations, terminaling and storage services, and crude oil supply and trading activities. These costs generally fluctuate based on operating activity levels, throughput volumes, and commodity trading volumes.
21
Gross Profit
For the three months ended June 30, 2026 and 2025, gross profit was $6,634,299 and $4,579,669, respectively, representing an increase of $2,054,630, or 44.86%.
The increase in gross profit reflects improved profitability across the Company’s midstream operations despite the change in revenue mix during the period. Gross profit from the transportation and logistics segment increased approximately 30.0%, driven primarily by the reorientation of transportation services with crude oil trading activities in areas with shorter hauling radiuses and cost efficiencies associated with related-party contracts containing minimum volume commitments. Gross profit from the terminaling and storage segment increased approximately 22.8%, primarily attributable to fee-based commercial arrangements and related-party activities. In addition, the Company’s expanding supply and trading segment contributed approximately $1.0 million of gross profit during the 2026 period as increased trade volumes and optimization of crude oil trading activities contributed to the Company’s results.
Operating Expenses
For the three months ended June 30, 2026 and 2025, operating expenses were $6,475,997 and $11,356,416, respectively, representing a decrease of $4,880,419, or 42.97%. The decrease in operating expenses was primarily attributable to lower depreciation and amortization expense. The decrease in depreciation expense was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, as well as revisions to the estimated useful lives of certain property and equipment based on operational experience and expected usage.
Interest Expense
For the three months ended June 30, 2026 and 2025, total interest expense, including related-party interest expense, was $4,120,977 and $4,436,831 respectively, representing a decrease of $315,854, or 7.12%. The decrease in interest expense was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, partially offset by interest expense associated with finance lease and debt obligations 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, 2026 and 2025, the Company recognized an unrealized gain on marketable securities of $346,871 and an unrealized loss of $1,731,160, respectively, representing an increase of $2,078,031.
The Company’s marketable securities are recorded at fair value based on quoted market prices, with unrealized gains and losses recognized in earnings during the applicable reporting period.
Segment Operating Results for the three months ended June 30, 2026 and 2025
Operating Results of our Terminaling and Storage Segment:
| 2026 | 2025 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 7,399 | $ | 13,396,481 | $ | (13,389,082 | ) | -99.9 | % | |||||||
| Revenues - related party | 1,872,351 | 5,246,692 | (3,374,341 | ) | -64.3 | % | ||||||||||
| Total revenues | 1,879,750 | 18,643,173 | (16,763,423 | ) | -89.9 | % | ||||||||||
| Cost of revenues | 53,929 | 17,156,132 | (17,102,203 | ) | -99.7 | % | ||||||||||
| Gross profit | $ | 1,825,821 | $ | 1,487,041 | $ | 338,780 | 22.8 | % | ||||||||
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The Terminaling and Storage segment provides crude oil receipt, storage, throughput, transfer, loading and related terminal services. Revenues generated by the terminaling and storage segment declined primarily due to reduced receipts from pipeline and terminal utilization during the period. Despite the decrease in revenues, gross profit increased primarily due to fee-based commercial arrangements, including related-party take-or-pay and minimum volume commitments. Under these arrangements, customers are contractually obligated to make payments for specified minimum throughput volumes or reserved tank capacity regardless of actual utilization. Because these payments relate principally to the availability of existing terminal and storage capacity, periods in which committed volumes or capacity are not fully utilized generally result in limited incremental cost of revenues associated with the related payments. As a result, these contractual commitments contributed to higher gross margins and increased gross profit during the period despite lower overall revenues. We continue to pursue opportunities to improve efficiencies, modernize midstream business operations and enhance the profitability of our terminaling and storage assets.
Operating Results of our Transportation Logistics Segment:
| 2026 | 2025 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 19,213 | $ | 7,601,942 | $ | (7,582,729 | ) | -99.7 | % | |||||||
| Revenues - related party | 3,730,702 | 2,854,331 | 876,371 | 30.7 | % | |||||||||||
| Total revenues | 3,749,916 | 10,456,273 | (6,706,357 | ) | -64.1 | % | ||||||||||
| Cost of revenues | - | 7,363,645 | (7,363,645 | ) | -100.0 | % | ||||||||||
| Gross profit | $ | 3,749,916 | $ | 3,092,628 | $ | 657,288 | 21.3 | % | ||||||||
The Transportation and Logistics segment provides crude oil gathering, trucking, pipeline transportation and related logistics services. For the three months ended June 30, 2026, total revenues decreased primarily as a result of the Company’s continued implementation of commercial strategies that integrate physical crude oil transportation services with its supply, marketing and trading activities, resulting in lower standalone transportation activity during the period. Despite the decrease in total revenues, gross profit increased primarily due to a shift in the segment’s revenue mix toward related-party contractual minimum volume commitments and take-or-pay arrangements. Under these arrangements, customers are contractually obligated to make payments based on specified minimum transportation or throughput volumes regardless of actual utilization. When committed volumes are not fully utilized, the related payments may be recognized without corresponding variable transportation costs, resulting in limited or no cost of revenues associated with such payments. Accordingly, the increased contribution from these contractual commitments, together with the reorientation of transportation services toward crude oil trading activities in areas with shorter hauling distances, resulted in higher gross margins and increased gross profit during the period despite lower overall revenues.
Operating Results of our Supply and Trading Segment:
| 2026 | 2025 | Change ($) |
Change (%) |
|||||||||||||
| Revenues | $ | 26,487,540 | $ | 9,152,025 | $ | 17,335,515 | 189.4 | % | ||||||||
| Revenues - related party | - | - | - | |||||||||||||
| Total revenues | 26,487,540 | 9,152,025 | 17,335,515 | 189.4 | % | |||||||||||
| Cost of revenues | 25,428,979 | 9,129,586 | 16,299,393 | - | ||||||||||||
| Gross profit | $ | 1,058,561 | $ | 22,439 | $ | 1,036,123 | 4617.6 | % | ||||||||
The Crude Oil Supply and Trading segment purchases and sells crude oil and related petroleum products and manages associated supply, marketing and logistics activities. Revenues and gross profit in the supply and trading segment continue to benefit the Company’s earnings due to higher realized margins from optimized crude oil trading activities and increased trade volumes as a result of efforts to expand our customer network.
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Results of Consolidated Operations for the six months ended June 30, 2026 and 2025
Revenue
For the six months ended June 30, 2026 and 2025, revenues were $51,575,316 and $66,439,737, respectively, representing a decrease of $14,864,421, or 22.37%. The decrease in revenue was primarily attributable to lower revenues from the Company’s transportation and logistics and terminaling and storage segments, including the impact of the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC. These decreases were partially offset by the expansion of the Company’s crude oil supply and trading activities, which generated approximately $40.0 million of revenue during the 2026 period.
The change in revenue mix also reflects the Company’s continued implementation of commercial strategies that integrate physical crude oil transportation, terminaling and related logistics services with its expanding supply, marketing and trading activities. The Company’s earnings and cash flows from its midstream business operations are primarily affected by market conditions, commodity price fluctuations and crude oil production levels within the Company’s operating regions, which influence throughput volumes, transportation activity, storage utilization and trading margins.
Cost of Revenue
For the six months ended June 30, 2026 and 2025, cost of revenues was $39,217,787 and $57,101,634, respectively, representing a decrease of $17,883,847, or 31.32%. The decrease in cost of revenues was primarily attributable to lower costs associated with the Company’s transportation and logistics and terminaling and storage segments, including the impact of the July 2025 divestiture, largely offset by approximately $39.0 million of cost of revenues associated with the expansion of the Company’s crude oil supply and trading activities during the 2026 period.
Cost of revenues primarily consists of costs associated with the Company’s transportation and logistics operations, terminaling and storage services, and crude oil supply and trading activities, and generally fluctuates based on operating activity levels, throughput volumes, commodity prices and trading volumes.
Gross Profit
For the six months ended June 30, 2026 and 2025, gross profit was $12,357,529 and $9,338,103, respectively, representing an increase of $3,019,426, or 32.33%.
The increase in gross profit reflects improved profitability across the Company’s midstream operations despite lower overall revenues and the change in revenue mix during the period. Gross profit from the terminaling and storage segment increased approximately 107.2%, primarily attributable to fee-based commercial arrangements and related-party activities. Gross profit from the transportation and logistics segment increased approximately 14.5%, driven primarily by the reorientation of transportation services with crude oil trading activities in areas with shorter hauling radiuses and cost efficiencies associated with related-party contracts containing minimum volume commitments. In addition, the Company’s expanding supply and trading segment contributed approximately $1.0 million of gross profit during the 2026 period as increased trade volumes and optimization of crude oil trading activities contributed to the Company’s results.
Operating Expenses
For the six months ended June 30, 2026 and 2025, operating expenses were $14,624,493 and $22,557,295, respectively, representing a decrease of $7,932,802, or 35.17%. The decrease in operating expenses was primarily attributable to lower depreciation and amortization expense resulting from the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, as well as revisions to the estimated useful lives of certain property and equipment based on operational experience and expected usage.
Interest Expense
For the six months ended June 30, 2026 and 2025, total interest expense, including related-party interest expense, was $6,134,388 and $5,621,029, respectively, representing an increase of $513,359, or 9.13%. The increase in interest expense was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, partially offset by interest expense associated with finance lease and debt obligations assumed in connection with the acquisition of the Endeavor Entities on October 1, 2024.
24
Unrealized Gain (Loss) on Marketable Securities
For the six months ended June 30, 2026 and 2025, the Company recognized an unrealized gain on marketable securities of $335,493 and an unrealized loss of $78,406, respectively, representing an increase of $413,899.
The Company’s marketable securities are recorded at fair value based on quoted market prices, with unrealized gains and losses recognized in earnings during the applicable reporting period.
Segment Operating Results for the six months ended June 30, 2026 and 2025
Operating Results of our Terminaling and Storage Segment:
| 2026 | 2025 | Change |
Change |
|||||||||||||
| Revenues | $ | 147,931 | $ | 35,222,983 | $ | (35,075,052 | ) | -99.6 | % | |||||||
| Revenues - related party | 3,604,569 | 7,284,226 | (3,679,657 | ) | -50.5 | % | ||||||||||
| Total revenues | 3,752,500 | 42,507,209 | (38,754,709 | ) | -91.2 | % | ||||||||||
| Cost of revenues | 109,247 | 39,971,144 | (39,861,897 | ) | -99.7 | % | ||||||||||
| Gross profit | $ | 3,643,253 | $ | 2,536,065 | $ | 1,107,188 | $ | 43.7 | % | |||||||
The Terminaling and Storage segment provides crude oil receipt, storage, throughput, transfer, loading and related terminal services. For the six months ended June 30, 2026, total revenues decreased primarily due to lower terminal utilization and throughput activity during the period. Despite the decrease in revenues, gross profit increased primarily due to fee-based commercial arrangements, including related-party take-or-pay and minimum volume commitments. Under these arrangements, customers are contractually obligated to make payments for specified minimum throughput volumes or reserved tank capacity regardless of actual utilization. Because these payments relate principally to the availability of existing terminal and storage capacity, periods in which committed volumes or capacity are not fully utilized generally result in limited incremental cost of revenues associated with the related payments. As a result, these contractual commitments contributed to higher gross margins and increased gross profit during the period despite lower overall revenues. We continue to pursue opportunities to improve efficiencies, modernize midstream business operations and enhance the profitability of our terminaling and storage assets.
Operating Results of our Transportation Logistics Segment:
| 2026 | 2025 | Change |
Change |
|||||||||||||
| Revenues | $ | 421,942 | $ | 18,563,956 | $ | (18,142,014 | ) | -97.7 | % | |||||||
| Revenues - related party | 7,363,210 | 5,368,572 | 1,994,638 | 37.2 | % | |||||||||||
| Total revenues | 7,785,152 | 23,932,528 | (16,147,376 | ) | -67.5 | % | ||||||||||
| Cost of revenues | - | 17,130,490 | (17,130,490 | ) | -100.0 | % | ||||||||||
| Gross profit | $ | 7,785,152 | $ | 6,802,038 | $ | 983,114 | $ | 14.5 | % | |||||||
The Transportation and Logistics segment provides crude oil gathering, trucking, pipeline transportation and related logistics services. For the six months ended June 30, 2026, total revenues decreased primarily as a result of the Company’s continued implementation of commercial strategies that integrate physical crude oil transportation services with its supply, marketing and trading activities, resulting in lower standalone transportation activity during the period. Despite the decrease in total revenues, gross profit increased primarily due to a shift in the segment’s revenue mix toward related-party contractual minimum volume commitments and take-or-pay arrangements. Under these arrangements, customers are contractually obligated to make payments based on specified minimum transportation or throughput volumes regardless of actual utilization. When committed volumes are not fully utilized, the related payments may be recognized without corresponding variable transportation costs, resulting in limited or no cost of revenues associated with such payments. Accordingly, the increased contribution from these contractual commitments, together with the reorientation of transportation services toward crude oil trading activities in areas with shorter hauling distances, resulted in higher gross margins and increased gross profit during the period despite lower overall revenues.
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Operating Results of our Supply and Trading Segment:
| 2026 | 2025 | Change |
Change |
|||||||||||||
| Revenues | $ | 40,037,664 | $ | 24,808,502 | $ | 15,229,162 | 61.4 | % | ||||||||
| Revenues - related party | - | - | - | |||||||||||||
| Total revenues | 40,037,664 | 24,808,502 | 15,229,162 | 61.4 | % | |||||||||||
| Cost of revenues | 39,108,541 | 24,030,401 | 15,078,140 | |||||||||||||
| Gross profit | $ | 929,123 | $ | 778,101 | $ | 151,022 | $ | 19.4 | % | |||||||
The Crude Oil Supply and Trading segment purchases and sells crude oil and related petroleum products and manages associated supply, marketing and logistics activities. Revenues and gross profit in the supply and trading segment continue to benefit the Company’s earnings due to higher realized margins from optimized crude oil trading activities and increased trade volumes as a result of efforts to expand our customer network.
Cash Flow
The following table sets forth the primary sources and uses of cash and cash equivalents for the six months ended June 30, 2026 and 2025 as presented below:
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used) by operating activities | $ | (3,664,073 | ) | $ | (6,980,336 | ) | ||
| Net cash provided by (used) by investing activities | (500,000 | ) | 1,860,000 | |||||
| Net cash provided (used) by financing activities | 2,327,925 | 5,108,500 | ||||||
Liquidity and Capital Resources
Operating Activities
Net cash used in operating activities was approximately $3.7 million for the six months ended June 30, 2026, compared to approximately $7.0 million cash usage during the comparable 2025 period. Operating cash flows during the 2026 period were primarily impacted by the Company’s net loss and working capital changes, including increases in accounts receivable, partially offset by non-cash expenses including depreciation and amortization, stock-based compensation, and non-cash interest expense.
During the six months ended June 30, 2026, approximately $10.2 million of notes payable and related working capital balances were settled pursuant to existing netting arrangements with related parties. The transaction was non-cash and therefore did not impact cash flows from operating or financing activities.
As of June 30, 2026, the Company had approximately $5.2 million outstanding under its accounts receivable factoring arrangement with B1 Bank. During the year, B1 Bank applied approximately $1.8 million of restricted cash maintained by the Company against amounts outstanding under the facility.
Investing Activities
During the six months ended June 30, 2026, the Company invested $500,000 in a joint venture.
During the six months ended June 30, 2025, investing activities primarily consisted of approximately $1.9 million of proceeds received from the sale of vehicles and trailers.
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Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2026 consisted of approximately $7.2 million of proceeds received from loans and notes payable, offset by approximately $4.8 million of payments and other reductions in debt obligations.
During the six months ended June 30, 2025, financing activities included approximately $12.3 million of proceeds from the issuance of notes payable and other financing arrangements, offset by approximately $7.2 million of repayments on notes payable and finance lease liabilities.
Liquidity Outlook
Although the Company had no firm contractual commitments for capital expenditures as of June 30, 2026, management expects to continue investing in the development of its Texas remediation and wash plant facilities as market conditions and available capital permit.
The Company expects to fund its operations and strategic growth initiatives through a combination of operating cash flows, financing activities, and capital management initiatives. The Company’s ability to meet its obligations and execute its growth strategy will depend, in part, on its ability to improve operating cash flows and obtain additional financing. The availability and terms of such financing are subject to market conditions, operating performance, and capital market availability, and there can be no assurance that additional financing will be available on acceptable terms, or at all. Management continues to evaluate opportunities to enhance liquidity, manage existing obligations, and support ongoing operations and development activities.
Contractual Obligations
The Company remains in discussions with Maxus Capital Group, LLC regarding certain finance lease obligations that were subject to a prior forbearance agreement entered into during 2025. As of June 30, 2026, the related finance lease liabilities continue to be classified as current due to the existing payment status and ongoing negotiations with the lessor.
| Description | June 30, 2026 |
December 31, 2025 |
||||||
| Principal portion of finance lease obligations | $ | 8,711,783 | $ | 8,711,784 | ||||
| Accrued interest | $ | 837,481 | $ | 390,068 | ||||
| Total finance lease liabilities (current) | $ | 9,549,265 | $ | 9,101,852 | ||||
Our contractual obligations as of June 30, 2026 for operating lease liabilities are for office warehouse space, land, and truck yards, in which leases end in 2026 through 2027. Contractual payments under operating lease obligations as of June 30, 2026 are as follows:
| 2026 | $ | 119,008 | ||
| 2027 | $ | 141,509 | ||
| 2028 | $ | - | ||
| 2029 | $ | - | ||
| Thereafter | $ | - | ||
| Total Remaining | $ | 260,517 |
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 notes have variable interest rates based on the prime rate. These may expose us to further interest expense if the prime rate increases.
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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
Except for revisions to the estimated useful lives of certain property and equipment disclosed in Note 7 to the condensed consolidated financial statements, there have been no material changes to our critical accounting policies or use of estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on April 15, 2026.
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
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 as of June 30, 2026 pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.
The material weaknesses primarily relate to insufficient personnel within our accounting and financial reporting functions, which has impacted segregation of duties and effective review controls over certain accounting processes, including technical accounting matters and the work of specialists involved in the estimation process. These deficiencies create a reasonable possibility that material misstatements of the financial statements may not be prevented or detected on a timely basis.
Management continues to implement remediation measures intended to address these material weaknesses, including enhanced review procedures, expanded use of external accounting and valuation specialists, improved oversight processes, and efforts to strengthen the Company’s accounting and financial reporting personnel resources. While progress has been made, the material weaknesses had not been fully remediated as of June 30, 2026.
Changes in Internal Control Over Financial Reporting
Other than the remediation activities described above, there were no other changes in our internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s 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, Vivakor, Inc., 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. The parties are in the process of settling this litigation through mediation.
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.
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. Co-Defendant Validus Energy II Midcon, LLC prevailed upon a motion to consolidate Case No. CJ-2025-7 with the proceeding involving YellowJacket Services, LLC. 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 attorney’s fees and costs of court. Defendants CPE Gathering Midcon, LLC, Vivakor, Inc., and Validus Energy II Midcon, LLC prevailed on motions against consolidated Plaintiff YellowJacket Services, LLC to remove liens against property of Validus Energy II Midcon, LLC and to compel arbitration against Defendants CPE Gathering Midcon, LLC and Vivakor, Inc. Claims of Plaintiff YellowJacket Services, LLC 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. Cross-Plaintiff Validus Energy II Midcon, LLC subsequently filed a motion to appoint a receiver pending resolution of the underlying case, which was ultimately granted. The Company is vigorously defending and pursuing a settlement of the matter.
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. The parties are in the process of settling this litigation.
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.
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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.
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.
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.
VivaVentures Remediation Corp. v. Viva Wealth Fund I, LLC, Case No. 250907053 (Dist. Ct., Salt Lake City, Utah—August 27, 2025)—Plaintiff, a Vivakor subsidiary, alleges breach of contract, breach of the covenant of good faith and fair dealing, quantum meruit, and unjust enrichment against Defendants, seeking damages exceeding $5.3 million, plus attorney’s fees and costs of court, relating to a lease for RPC equipment. Defendant has not yet responded.
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. On November 5, 2025, the Company entered into a Settlement Agreement (the “Nelson Settlement Agreement”) with Tyler Nelson (“Nelson”), in order to settle claims made by Nelson that he was not paid for work performed for the Company, which claims formed the basis of a lawsuit entitled Tyler Nelson v. Vivakor, Inc., et al., Case No. 30-2025-01503021-CU-OE-CJC (Sup. Ct. Orange Cty., Cal.—Aug. 11, 2025) (the “Nelson Lawsuit”). Under the terms of the Nelson Settlement Agreement the Company was obligated to pay Nelson as full satisfaction of all alleged wage losses and alleged non-wage damages: (i) $250,000 on or before November 5, 2026, (ii) $100,000 within 30 days from the date of the Nelson Settlement Agreement, (iii) $100,000 within 60 days from the date of the Nelson Settlement Agreement, and (iv) $1,550,000 within 90 days from the date of the Nelson Settlement Agreement. The Company paid Nelson the initial $250,000 payment. Nelson was formerly the Company’s Chief Financial Officer and a Director. As a result of the Nelson Settlement Agreement, all dates and deadlines related to the Nelson Lawsuit have been taken off calendar by the Court, which will retain jurisdiction of the Nelson Lawsuit through the final payment of the Nelson Settlement Agreement consideration. The Company made the first three payments under the Nelson Settlement Agreement but did not make the final $1,550,000 payment. As a result, the Plaintiff entered the stipulated judgment against the Company and is attempting to collect the remaining amount owed from the Company, its subsidiaries and certain of its executive officers.
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SRAX, Inc. v. Vivakor, Inc., et al., Case No. 2023CUB014131 (Sup. Ct. Ventura Cty., Cal.)—Plaintiff asserts claims for breach of contract for Defendant’s failure to pay Plaintiff for financial technology services. Plaintiff obtained a default judgment. Defendant has filed a motion to set aside the default judgment, which is pending before the court. Plaintiff subsequently filed a motion to domesticate its judgment in Texas and appoint a receiver in the following action: SRAX, Inc. v. Vivakor, Inc., Cause No. 2023CUBC014131 (Super. Ct. Ventura Cnty., Cal.), domesticated in the 333rd Judicial District Court of Harris County, Texas, SRAX, Inc. v. Vivakor, Inc., Cause No. 2025-41753. The matter is currently stayed by mutual agreement of the parties. The parties reached a tentative settlement at a mediation held on August 3, 2026 and are in the process of formalizing the settlement documents.
Herminio Adriano, et al v. Vivakor, Inc. et al, Case No 8:26-cv-00485-DOC (US District Court Central District of California Southern Division)—Plaintiff asserts claims for Securities violations related to Vivakor’s role in fundraising for the construction of certain assets that were to be constructed and leased back to Vivakor. Vivakor is vigorously defending the case.
In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain, and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operation.
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 March 31, 2026, and subsequent thereto. 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 May 19, 2026, the Company issued 2,445 shares of its common stock to certain holders of its Series A Preferred Stock for the dividends owed to them for the period from March 31, 2026 to April 30, 2026, in accordance with the terms of the Series A Preferred Stock Certificate of Designation.
On May 12, 2026, the Company issued 19,678 shares of its common stock to James Ballengee, the Company’s Chief Executive Officer and a member of the Board of Directors, for dividends owed to him as dividends on the Company’s Series A Preferred Stock for the periods ended January 31, 2026 and April 30, 2026, in accordance with the terms of the Series A Preferred Stock Certificate of Designation.
On May 11, 2026, the Company issued 34,675 shares of its common stock to certain holders of its Series A Preferred Stock for the dividends owed to them for the periods ended January 31, 2026 and April 30, 2026, in accordance with the terms of the Series A Preferred Stock Certificate of Designation.
On May 11, 2026, the Company issued 12,500 shares of its common stock to Kimberly Hawley, the Company’s Chief Financial Officer and Secretary as a discretionary bonus for services performed for the Company under the terms of her Employment Agreement. The shares were issued with a standard Rule 144 restrictive legend.
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On May 7, 2026, the Company issued 7,136 shares of common stock to ClearThink Capital Partners under the terms of a Consulting Agreement. The shares were issued with a standard Rule 144 restrictive legend.
As previously disclosed, between June 6, 2025 and June 9, 2025, the Company issued convertible promissory notes (the “Lender Notes”), to seven non-affiliated accredited investors (the “Lenders”), 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 Lenders (the “Lender SPA”). Under the terms of the Lender SPA and the Lender Notes, the Company received $4,350,000 prior to deducting customary fees. On January 30, 2026, the Company entered into Forbearance and Note Amendment Agreements (the “Agreements”) with the each of the seven investors. As of the date the Agreements were entered into the Company owes approximately $2,242,793 under the Lender Notes, having satisfied approximately $2,874,854 of the aggregate principal amount since the Lender Notes were issued. Under the terms of the Agreements, (i) the parties agreed to extend the maturity date of the Lender Notes until January 31, 2027; (ii) the Company agreed to issue an aggregate of 280,839 shares of its restricted common stock (the “Agreement Shares”); (iii) the Company agreed to pay the following aggregate amounts to payoff the Lender Notes: $378,433.25 on or before March 1, 2026, $396,414.53 on or before April 30, 2026, $258,903.84 on or before June 30, 2026, $454,796.89 on or before July 31, 2026, $17,433.25 on or before September 30, 2026, $356,193.98 on or before October 31, 2026, $372,627.23 on or before January 31, 2027; and (iv) no conversions will be permitted under the Lender Notes unless the Company either fails to pay the Lender Notes in accordance with the above payment terms. The Company issued the Agreement Shares on May 7, 2026. On April 30, 2026, the Company received a Notice of Conversion from one of the investors and issued 3,822 shares of common stock to the investor in exchange for the conversion of $73,183.25 owed to that investor under the Lender Notes. Between June 4, 2026 and June 5, 2026, the Company received Notices of Conversion from several of the Lenders converting a total of $1,037,025 of the amounts due under the Lender Notes into 104,501 shares of the Company’s common stock. Between June 4, 2026 and June 17, 2026, the Company received Notices of Conversion from several of the Lenders converting a total of $1,628,113.78 of the amounts due under the Lender Notes into 214,522 shares of the Company’s common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5.
July 2026 Reverse Stock Split
On July 17, 2026, the Company effected a 1-for-20 reverse stock split of its common stock pursuant to a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation following shareholder approval obtained at the Company’s Annual Meeting of Shareholders held on June 30, 2026.
March 2026 Reverse Stock Split
On March 24, 2026, the Company effected a 1-for-200 reverse stock split of its common stock pursuant to a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation following shareholder approval obtained at the Company’s Special Meeting held on December 22, 2025.
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May 2026 Private Financing Transaction (the “May 2026 Financing”)
Convertible Promissory Notes
The following summary of the May 2026 Notes does not purport to be complete and is qualified in its entirety by reference to the forms of May 2026 SPA and May 2026 Notes filed as exhibits to a previously filed Current Report on Form 8-K.
On May 8, 2026, the Company entered into a Securities Purchase Agreement (the “MAY 2026 SPA”) with certain institutional investors (collectively, the “Selling Stockholder”) providing for the issuance of convertible promissory notes (the “May 2026 Notes”) with aggregate gross proceeds to the Company of up to $12.0 million, before fees and expenses, in two closings. The May 2026 Notes have an aggregate principal amount of $15.0 million, reflecting a $3.0 million original issue discount of 20%.
The initial closing occurred on May 8, 2026, pursuant to which the Company received $6.0 million in gross proceeds. The second closing for an additional $6.0 million closed on July 16, 2026. Pursuant to the MAY 2026 SPA and the May 2026 Notes, the shares underlying the conversion of these two convertible promissory notes was registered on a Registration Statement on Form S-1 that went effective on July 16, 2026.
The May 2026 Notes are convertible into shares of the Company’s Common Stock at a conversion price equal to the greater of $0.37 per share and 80% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the five trading days immediately preceding conversion. On July 15, 2026, the Company and the Selling Stockholder entered into an Amendment No. 1 to the MAY 2026 SPA, May 2026 Notes and SEPA, under which the parties agreed the Selling Stockholder would fund the second closing in exchange for the Company agreeing the $0.37 floor price per share would not change as a result of the Company’s 1-for-20 reverse stock split that went effective on July 17, 2026.
Conversions under the May 2026 Notes are generally subject to a 4.99% beneficial ownership limitation, which may be waived upon notice by the applicable holder. In addition, absent shareholder approval, conversions are limited to the extent necessary to comply with Nasdaq’s 19.99% issuance limitation.
The May 2026 Notes contain customary events of default, including payment and covenant defaults, which may result in acceleration of amounts due under the notes and certain additional default-related remedies, including an increase in the outstanding principal amount upon the occurrence of certain events of default.
The Company is using the proceeds from the May 2026 Financing for working capital, debt reduction, and general corporate purposes.
RBW Capital Partners LLC, a division of Dawson James Securities, Inc., acted as placement agent in connection with the May 2026 Financing.
Standby Equity Purchase Agreement
The following summary of the Standby Equity Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the form of the Standby Equity Purchase Agreement filed as an exhibit to the registration statement of which this prospectus forms a part.
On May 8, 2026, the Company entered into a standby equity purchase agreement (the “SEPA”) with an institutional investor (the “Selling Stockholder”) providing for the potential purchase by the Selling Stockholder of up to $100 million of the Company’s common stock over a 36-month period, subject to the terms and conditions of the SEPA.
Under the SEPA, the Company may, at its discretion, direct the Selling Stockholder to purchase shares of common stock from time to time, subject to specified volume limitations, pricing formulas, the number of shares registered under an effective registration statement and a 4.99% beneficial ownership limitation set forth in the agreement. Shares issued under the SEPA will generally be purchased at a discount to prevailing market prices.
The Company controls the timing and amount of any Company-directed sales under the SEPA, subject to the terms and limitations contained in the agreement; however, while any promissory note issued to the Selling Stockholder remains outstanding, the Selling Stockholder may deliver an Investor Notice that is deemed to be a Purchase Notice and requires the Company to issue shares under the SEPA at the applicable conversion price. Actual sales under the SEPA will depend on a variety of factors, including market conditions, trading prices of the Company’s common stock, and the Company’s capital needs.
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In the event there are amounts due to the Selling Stockholder under any promissory note issued by the Company then the Selling Stockholder has the right to issue the Company an Investor Notice, which is deemed to be a Purchase Notice and requires the Company to issue the Selling Stockholder shares of Common Stock under the SEPA at the applicable conversion price in the relevant promissory note. The Company will not receive any cash proceeds from an Investor Notice but will receive a reduction in the amounts owed under the applicable promissory note.
The Company is required to file a separate registration statement covering 270,270,271 shares issuable under the SEPA, which must be declared effective by the SEC before any sales may occur under the agreement. The 270,270,271 shares being registered for issuance under the SEPA represent the maximum number of shares issuable under the Equity Line, including shares that may be issued pursuant to Company-directed Advances and Investor Notices.
Cedarview Forbearance Agreement
On May 6, 2026, the Company entered into a Forbearance Agreement (the “Cedarview Forbearance Agreement”) with Cedarview Opportunities Master Fund, LP (the “Investor”), under which the Investor agreed to forbear its rights under that certain Loan and Security Agreement (the “Cedarview Agreement”), dated February 5, 2024, the senior secured note to the Investor in an aggregate principal amount of $3,000,000 (the “Initial Note”), that certain Loan and Security Agreement, dated October 31, 2024, and a senior secured note to the Investor in an aggregate principal amount of $3,670,160.77 (the “Investor Second Note”, together with the Initial Note, the “Investor Notes”), as those documents have previously been amended, and the Investor agreed to extend the maturity date of the Initial Note and the Second Note to October 31, 2026, so long as the Company (i) make certain prepayments under the Existing Notes from the RBW SEPA or other financings, (ii) pays the Investor $250,000 from the second tranche of the RBW Financing, as a mandatory required prepayment of the Existing Notes, (iii) that if the Company closes the contemplated Olenox Transaction, by no later than the second (2nd) Business Day after such closing, the Company will pledge 2,000,000 shares of Olenox common stock the Company receives in the Olenox Transaction as additional collateral securing the Company’s payment obligations under the Existing Notes, in form and substance satisfactory to the Investor, in its sole discretion, and (iv) the Company issues the Investor 275,000 shares of its common stock, restricted in accordance with Rule 144 (the “Investor Shares”).
Relisting On Nasdaq
On April 23, 2026, the Company received a letter (the “April Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Nasdaq Hearing Panel (the “Panel”) determined that the Company is in compliance with the Minimum Bid Price Requirement and that trading in the Company’s securities will resume trading on the Exchange effective April 27, 2026. Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the April Letter. In the event that the Company becomes deficient with the Minimum Bid Price Requirement, the Company will not be afforded the opportunity to submit a compliance plan for the Staff’s consideration and the Staff will issue a Delisting Determination Letter, following which the Company may request review by the Panel, at which the Company may present a compliance plan for the Panel’s consideration.
Consulting Agreement
In May 2026, the Company entered into an Independent Contractor Agreement with William Tuorto for consulting services he is performing for the Company dating back to April 1, 2026. In connection with the agreement, the Company issued 3,455 shares of common stock under the 2023 Plan, which shares were issued without a restrictive legend pursuant to a Form S-8 registration statement. Under the terms of the agreement, the consultant is Consultant responsible for assisting in the management and operations related to the Company being a public company; providing advice regarding the strategy of the Company and its subsidiaries; general advice regarding dispositions and/or acquisitions and negotiation assistance, which the Company believes will be beneficial to it; and any other consulting and project management services the Company may stand in need of as communicated in writing (the “Services”). In exchange for the Services, the Company agreed to pay the consultant $50,000 per month, with additional fees due if the Company achieves certain EBITDA thresholds for the quarters ending June 30, 2026, September 30, 2026 and December 31, 2026. The Company also agreed to pay the Consultant a $300,000 contract signing fee. All fees owed to the Consultant are payable in shares of the Company’s common stock, priced at the 52-week low closing price preceding the applicable calendar quarter, with such price not subject to adjustment for stock splits, and payable out of any applicable equity incentive plan the Company has in place that has been registered under Form S-8 so the shares may be issued without a restrictive legend.
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ITEM 6. EXHIBITS
EXHIBIT INDEX
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| Exhibit No. | Exhibit Description | Form | Date | Number | Herewith | |||||
| 101.INS | Inline XBRL Instance Document | Filed | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed | ||||||||
| 104 | Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101). |
| * | 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, 2026
| VIVAKOR, INC. | ||
| By: | /s/ Kimberly Hawley | |
| Kimberly Hawley | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
Date: August 19, 2026
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