UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended March 31, 2025

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

For the Transition Period from _________ to _________

Commission file number: 000-41286

VIVAKOR, INC.

(Exact name of registrant as specified in its charter)

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

5220 Spring Valley Road, Suite 500 Dallas, TX		75242
(Address of Principal Executive Offices)		(Zip Code)

(949) 281-2606

(Registrant’s telephone number, including area code)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

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

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

As of May 20, 2025, there were 47,297,347 shares of the registrant’s common stock outstanding.

VIVAKOR, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		1

ITEM 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	1

	Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2025 and 2024 (unaudited)	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2025 and 2024 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2025 and 2024 (unaudited)	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5

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

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	27

ITEM 4.	Controls and Procedures	27

PART II. OTHER INFORMATION		29

ITEM 1.	Legal Proceedings	29

ITEM 1A.	Risk Factors	31

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

ITEM 3.	Defaults Upon Senior Securities	31

ITEM 4.	Mine Safety Disclosures	31

ITEM 5.	Other Information	32

ITEM 6.	Exhibits	34

SIGNATURES		38

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIVAKOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	765,366		$	651,022
Cash- restricted		4,023,417			3,025,970
Accounts receivable		12,933,776			1,626,994
Accounts receivable- related party		4,508,232			4,599,094
Prepaid expenses		3,859,479			1,204,790
Marketable securities		2,313,855			661,101
Inventories		132,324			205,529
Total current assets		28,536,449			11,974,500

Other assets		3,473,483			3,608,067
Notes receivable		245,020			242,714
Property and equipment, net		92,661,561			100,039,371
Right of use assets- operating leases		4,449,272			4,920,454
Intellectual property, net		8,142,220			8,348,703
Customer relationships, net		41,813,052			43,021,022
Goodwill		68,885,853			68,885,853
Total assets	$	248,206,910		$	241,040,684

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	43,629,485		$	29,601,665
Accounts payable and accrued expenses- related parties		2,416,728			831,984
Accrued compensation		1,373,536			1,249,099
Unearned revenue		9,107,297			9,107,297
Operating lease liabilities, current		2,611,259			2,636,151
Finance lease liabilities, current		4,063,363			4,267,396
Loans and notes payable, current		42,640,002			42,423,941
Loans and notes payable, current- related parties		21,570,295			21,810,164
Total current liabilities		127,561,760			111,927,697

Operating lease liabilities, long term		1,564,735			2,190,351
Finance lease liabilities, long term		4,359,961			5,135,601
Loans and notes payable, long term		5,948,617			6,514,010
Deferred tax liability		154,381			154,381
Total liabilities		139,439,659			125,922,040

Stockholders’ equity:
Preferred stock, $0.001 par value; 15,000,000 shares authorized, 107,789 and none outstanding as of March 31, 2025 and December 31, 2024	$	108			108
Common stock, $0.001 par value; 200,000,000 shares authorized; 45,003,523 and 41,709,190 were issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		45,003			41,709
Additional paid-in capital		210,935,247			208,167,537
Treasury stock, at cost		(20,000	)		(20,000	)
Accumulated deficit		(98,067,305	)		(88,951,426	)
Total Vivakor, Inc. stockholders’ equity		112,893,053			119,237,928
Noncontrolling interest		(4,125,802	)		(4,119,284	)
Total stockholders’ equity		108,767,251			115,118,644
Total liabilities and stockholders’ equity	$	248,206,910		$	241,040,684

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


	March 31,
	2025			2024
Revenues
Terminaling and storage	$	21,826,502		$	12,913,165
Terminaling and storage- related party		2,037,534			3,108,226
Transportation logistics		10,962,014			-
Transportation logistics- related party		2,514,241			-
Total revenues		37,340,291			16,021,391
Cost of revenues		32,581,857			14,953,254
Gross profit		4,758,434			1,068,137
Operating expenses:
Sales and marketing		-			11,040
General and administrative		5,369,313			1,664,966
Amortization and depreciation		5,831,602			1,009,053
Total operating expenses		11,200,915			2,685,059
Loss from operations		(6,442,481	)		(1,616,922	)
Other income (expense):
Unrealized gain (loss) on marketable securities		1,652,754			(82,638	)
Loss on disposition of asset		(1,597,913	)		-
Gain on deconsolidation of subsidiary		-			177,550
Interest income		25,482			2,307
Interest expense		(1,131,077	)		(444,040	)
Interest expense- related parties		(53,121	)		-
Other income		12,540			54,000
Total other income (expense)		(1,091,335	)		(292,821	)
Loss before provision for income taxes		(7,533,816	)		(1,909,743	)
Provision for income taxes		-			(800	)
Consolidated net loss		(7,533,816	)		(1,910,543	)
Less: Net loss attributable to noncontrolling interests		(6,518	)		(28,308	)
Net loss attributable to Vivakor, Inc.	$	(7,527,298	)	$	(1,882,235	)

Series A Preferred Stockholder Dividends	$	1,588,581		$	-
Net loss to common shareholders		(9,115,879	)		(1,882,235	)

Basic and diluted net loss per share	$	(0.21	)	$	(0.07	)

Basic weighted average common shares outstanding		43,076,850			26,391,937

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


	Series A Preferred Stock				Common Stock				Additional Paid-in		Treasury			Accumulated			Non-controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Stock			Deficit			Interest			Equity
December 31, 2024		107,789	$	108		41,709,190	$	41,709	$	208,167,537	$	(20,000	)	$	(88,951,426	)	$	(4,119,284	)	$	115,118,644
Issuance of common stock for a reduction of liabilities		-		-		227,069		227		380,773		-			-			-			381,000
Stock based compensation		-		-		553,072		553		500,870		-			-			-			501,423
Stock based compensation- Consultant		-		-		447,761		448		299,552		-			-			-			300,000
Common stock distributable- Series A Preferred Stock Dividends		-		-		2,066,431		2,066		1,586,515		-			(1,588,581	)		-			-
Net loss		-		-		-		-		-		-			(7,527,298	)		(6,518	)		(7,533,816	)
March 31, 2025 (unaudited)		107,789	$	108		45,003,523	$	45,003	$	210,935,247	$	(20,000	)	$	(98,067,305	)	$	(4,125,802	)	$	108,767,251

	Series A Preferred Stock				Common Stock				Additional Paid-in		Treasury			Accumulated			Non-controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Stock			Deficit			Interest			Equity
December 31, 2023		-	$	-		26,220,508	$	26,221	$	83,097,553	$	(20,000	)	$	(65,908,406	)	$	41,821		$	17,237,189
Issuance of common stock for a reduction of liabilities		-		-		300,000		300		285,000		-			-			-			285,300
Stock based compensation		-		-		-		-		327,985		-			-			-			327,985
Net loss		-		-		-		-		-		-			(1,882,235	)		(28,308	)		(1,910,543	)
March 31, 2024 (unaudited)		-	$	-		26,520,508	$	26,521	$	83,710,538	$	(20,000	)	$	(67,790,641	)	$	13,513		$	15,939,931

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	March 31,
	2025			2024
OPERATING ACTIVITIES:
Consolidated net loss	$	(7,533,816	)	$	(1,910,543	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		5,831,602			1,009,053
Stock-based compensation		501,423			327,985
Stock-based compensation- consultant		300,000			-
Unrealized (gain) loss- marketable securities		(1,652,754	)		82,638
Loss on disposition of assets		1,597,913			-
Gain on deconsolidation of subsidiary		-			(177,550	)
Changes in operating assets and liabilities:
Accounts receivable		(11,215,920	)		(1,551,490	)
Prepaid expenses		(2,654,689	)		(91,393	)
Inventory		73,205			(13,148	)
Other assets		767,099			(115,742	)
Right of use assets- operating leases		471,182			89,876
Operating lease liabilities		(650,508	)		(91,163	)
Accounts payable and accrued expenses		12,983,336			426,581
Interest on notes receivable		(2,306	)		(2,307	)
Interest on notes payable		1,184,198			187,524
Net cash used in operating activities		(35	)		(1,829,679	)

INVESTING ACTIVITIES:
Proceeds from the sale of vehicles and trailers		1,482,000			-
Purchase of equipment		-			(1,028,885	)
Net cash provided (used) in investing activities		1,482,000			(1,028,885	)

FINANCING ACTIVITIES:
Payment on financing lease liabilities		(979,673	)		(115,976	)
Proceeds from loans and notes payable		4,599,111			3,002,192
Proceeds from loans and notes payable- related party		1,664,150			-
Payment of notes payable		(4,489,161	)		-
Payment of notes payable- related party		(1,164,601	)		(4,686	)
Net cash provided (used) by financing activities		(370,174	)		2,881,530

Net increase in cash and cash equivalents		1,111,791			22,966
CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, BEGINNING OF PERIOD		3,676,992			744,307
CASH AND CASH EQUIVALENTS, and CASH RESTRICTED, END OF PERIOD	$	4,788,783		$	767,273

SUPPLEMENTAL CASHFLOW INFORMATION:
Cash paid during the year for:
Interest	$	218,014		$	2,193
Income taxes	$	-		$	-

Noncash transactions:
Accounts payable on purchase of equipment	$	414,459		$	1,207,577
Capitalized interest on construction in process	$	-		$	318,447
Common stock issued with debt	$	250		$	285,300
Common stock issued for a reduction in liabilities	$	381,000		$	-
Series A preferred shareholder stock dividend	$	1,588,581		$	-

See accompanying notes to consolidated financial statements

VIVAKOR, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1. Basis of Presentation

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2024 that were filed with our Form 10-K. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. The operating results for the three months ended March 31, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025.

Business

Vivakor, Inc. (“Vivakor” or the “Company”) is a socially responsible operator, acquirer and developer of technologies and assets in the oil and gas industry, as well as related environmental solutions. Currently, our efforts are primarily focused on operating two main segments: (i) transportation logistics services and (ii) terminaling and storage facility product and services related to oil and gas production.

Our transportation and facilities services primarily consist of trucking crude oil and produced water and transportation and terminaling services of crude oil via the Omega Gathering Pipeline. Our trucking services are centered in the Permian and Eagle Ford Basins. We utilize our trucking fleet to transport those products to a fully-integrated network of facilities where we blend various grades of crude oil grades of crude oil, and reuse or dispose of produced water.

Our terminaling and storage product and services primary consist of two operational major crude oil terminaling facilities. One is located in Colorado City, Texas, and the other facility is located in Delhi, Louisiana. Both facilities are located at the junction of several major interstate pipelines, receive various grades of crude oil from our customers. These crude oil terminals are industrial facilities that serve as hubs for the storage, handling and distribution of crude oil and petroleum products

We plan to perform remediation services utilizing our remediation processing centers (“RPCs”) at some point in the future. We are currently constructing a full-capacity RPC at the San Jacinto River & Rail Park in Harris County, Texas. Once complete, we anticipate the strategically located facility to be capable of processing oilfield solid wastes into economic byproducts such as condensate, propane, and butane. This RPC will feature an adjacent, complimentary truck wash facility from which we expect to derive additional revenue.

On October 1, 2024, we acquired Endeavor Crude, LLC, a Texas limited liability company, Equipment Transport, LLC, a Pennsylvania limited liability company, Meridian Equipment Leasing, LLC, a Texas limited liability company, and Silver Fuels Processing, LLC, a Texas limited liability company (collectively with their subsidiaries, the “Endeavor Entities”), making those entities wholly-owned subsidiaries, which gave us operations in several different areas of the midstream oil and gas industry. Our management and Board of Directors is currently reviewing all aspects of the Endeavor Entities’ assets and operations, including the synergies they have with our pre-acquisition operations and the debt related to certain of those assets and operations. In the event our management and Board of Directors determines some of those assets or operations do not fit organizationally with our other assets and operations then we may seek strategic alternatives with those certain assets and/or operations.

Deconsolidation

On September 7, 2023 we entered into an Acquisition Agreement (the “Agreement”) to sell 100% of the common stock of VivaSphere, Inc. (“VivaSphere”) and its assets, which were completely impaired by the Company in the fiscal year 2022, to a private buyer. The transaction closed on February 15, 2024. Under the terms of the Agreement, the purchase price of approximately $7.5 million consists of a promissory note payable (the “Convertible Note”) to the Company payable in full four years after the closing date. In the event the buyer does not close a transaction with a public company within one year from the close of the transaction, then the Company has the right to foreclose on and repossess the assets. The Convertible Note is convertible into common shares of a public company after the buyer closes a transaction to become a public company, which has a ceiling of 17.99% of the total number of shares outstanding of the public company. The “Conversion Price” shall equal the greater of (a) $0.75 per share or (b) the lesser of (i) 90% of the volume weighted average price for the Common Stock during the ten (10) consecutive trading days of the Common Stock immediately preceding the applicable Conversion Date on which the Company elects to convert all or part of this Note or (ii) $2.25 per share. Due to uncertainty of the collectability of the principal amount of the Convertible Note, we have established an allowance for the entire amount, and we have not accrued any interest receivable in connection with the Convertible Note.

Reclassifications

Certain reclassifications have been made to prior years’ purchase price allocation of accrued interest and principal note payable amounts to conform to the 2025 presentation.

Restricted Cash

The Company acquired an accounts receivable factoring agreement on October 1, 2024 in the acquisition of the Endeavor Entities, where the Company is required to maintain a reserve account with the factoring institution which is included as restricted cash.

Long Lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. For the three months ended March 31, 2025, the Company evaluated, and determined that there was no trigger event, and therefore no impairment incurred. There can be no assurance that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.

Intangible Assets and Goodwill

We account for intangible assets and goodwill in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). We assess our intangible assets in accordance with ASC 360 “Property, Plant, and Equipment” (“ASC 360”). Impairment testing is required when events occur that indicate an asset group may not be recoverable (“triggering events”). As detailed in ASC 360-10-35-21, the following are examples of such events or changes in circumstances (sometimes referred to as impairment indicators or triggers): (a) A significant decrease in the market price of a long-lived asset (asset group) (b) A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition. (c) A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator (d) An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) (e) A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) (f) A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. We performed an analysis and assessed no triggering event has occurred, and no impairment for the three months ended March 31, 2025.

Revenue Recognition

For the three months ended March 31, 2025, our sales consisted of storage services and the sale of crude oil or like products and transportation logistic services. For the three months ended March 31, 2025 and 2024, disaggregated revenue by customer type was as follows: $23,864,036 and $16,021,391 in terminaling and storage and $13,476,255 and none in Transportation Logistics. During the fourth quarter of 2024, the Company entered into a Crude Petroleum Sales Agreement with third parties for the purchase and sale of crude petroleum products in North Dakota. The Company realized sales of $13,269,810 from these contracts for the three months ended March 31, 2025.

Related Party Revenues

Our revenue from related parties for the three months ended March 31, 2025 and 2024 was $4,551,775 and $3,108,226.

We sell crude oil or like products and provide storage services to related parties under long-term contracts. We acquired these contracts in our August 1, 2022 acquisition of Silver Fuels Delhi, LLC and White Claw Colorado City, LLC and our October 1, 2024 acquisition of Silver Fuels Processing, LLC. These contracts were entered into in the normal course of our business. We also provide pipeline throughput and trucking logistics services to related parties under long-term contracts. We acquired these contracts in our October 1, 2024 acquisition of Endeavor Crude, LLC, Meridian Equipment Leasing, LLC. These contracts were entered into in the normal course of our business.

Major Customers and Concentration of Credit Risk

The Company has two major customers, which account for approximately 30.65% and 100% of the balance of accounts receivable as of March 31, 2025 and 2024. Our two major customers (one of which is a related party) account for approximately 15.29% and 99% of the Company’s revenues for the three months ended March 31, 2025 and 2024.

Advertising Expense

Advertising costs are expensed as incurred. The Company did not incur advertising expense for the three months ended March 31, 2025 and 2024.

Net Income/Loss Per Share

Basic net income (loss) per share is calculated by subtracting any preferred interest distributions from net income (loss), all divided by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method if their effect is dilutive. Potential dilutive instruments have been excluded from the calculation of the weighted-average number of common shares outstanding when the Company is in a net loss position. For the three and three months ended March 31, 2025 and 2024 our potential dilutive instruments were excluded from the weighted-average calculation as they were antidilutive. Potential dilutive instruments as of March 31, 2025 and 2024 include the following: convertible notes payable, which are convertible into approximately 10,471,437 and 224,560 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 2,420,081 and 2,281,673 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 479,685 and 690,304 shares of common stock. The Company issued free standing stock options to purchase 1,000,000 shares of our common stock to a third party in a bundled transaction with debt during 2023, which such stock option was exercised in September 2024 for a reduction in debt. The Company also had warrants outstanding to purchase 399,040 and 80,000 shares of common stock as of March 31, 2025 and 2024.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We believe our critical accounting estimates relate to the following: Recoverability of current and noncurrent assets, stock-based compensation, income taxes, effective interest rates related to long-term debt, lease assets and liabilities, valuation of stock used to acquire assets, derivatives, and fair values of the intangible assets and goodwill.

While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions.

Fair Value of Financial Instruments

The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results but did expand certain disclosures.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:

Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2:

Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3:

Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the consolidated balance sheets for marketable securities are classified as Level 1 assets due to observable quoted prices for identical assets in active markets. The carrying amounts reported in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their estimated fair market values based on the short-term maturity of these instruments. The recorded values of notes payable approximate their current fair values because of their nature, rates, and respective maturity dates or durations.

Note 2. Going Concern & Liquidity

We have historically suffered net losses and cumulative negative cash flows from operations, and as of March 31, 2025, we had an accumulated deficit of approximately $98 98,067,305 million. As of March 31, 2025 and December 31, 2024, we had a working capital deficit of approximately $99 million and $101.5 million, respectively. As of March 31, 2025, we had cash of approximately $4.8 million, of which $4 million is restricted cash. In addition, we have obligations to pay approximately $64.2 million of debt within one year of the issuance of these financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

During the three months ended March 31, 2025, subject to available cash flows, the Company continued its strategy to monetize its intellectual properties and execute its business plan, including the operation of the Endeavor Entities which were acquired in the fourth quarter of 2024. To date we have financed our operations primarily through our operations, debt financing, and private and public equity offerings.

Based on the above, we believe there is substantial doubt about the Company’s ability to continue as a going concern. The Company has prepared the consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity. Management cannot provide any assurance that the Company will be able to execute its plans to raise additional capital, close its merger and acquisitions, or that its operations or business plan will be profitable.

Note 3. Property and Equipment

The following table sets forth the components of the Company’s property and equipment at March 31, 2025 and December 31, 2024:

Schedule of property and equipment, net
	March 31, 2025							December 31, 2024
	Gross Carrying Amount		Accumulated Depreciation			Net Book Value		Gross Carrying Amount		Accumulated Depreciation			Net Book Value
Vehicles and trailers	$	27,405,817	$	(3,640,058	)	$	23,765,759	$	30,485,730	$	(1,856,461	)	$	28,629,269
Equipment		339,610		(64,518	)		275,092		339,610		(33,069	)		306,541
Land		732,000		-			732,000		732,000		-			732,000
Building		1,630,000		(328,852	)		1,301,148		1,630,000		(164,426	)		1,465,574
Crude & NGL terminal and related equipment		930,460		(600,876	)		329,584		930,460		(566,835	)		363,625
Crude Oil Transfer Stations		6,570,080		(1,798,266	)		4,771,814		6,570,080		(899,133	)		5,670,947
Pipeline and related facilities		42,244,680		(1,543,088	)		40,701,592		42,244,680		(771,544	)		41,473,136
Finance lease- Right of use assets		12,593,359		(5,391,175	)		7,202,184		12,593,359		(4,367,820	)		8,225,539

Construction in process:
Wash Plant Facilities		6,271,259		-			6,271,259		5,997,566		-			5,997,566
Remediation Processing Unit System A		2,892,343		-			2,892,343		2,892,343		-			2,892,343
Remediation Processing Unit System B		2,892,343		-			2,892,343		2,892,343		-			2,892,343
WCCC Tank Expansion		1,526,443		-			1,526,443		1,390,488		-			1,390,488
Total fixed assets	$	106,028,394	$	(13,366,833	)	$	92,661,561	$	108,698,659	$	(8,659,288	)	$	100,039,371

For the three months ending March 31, 2025 and 2024, depreciation expense was $3,527,645 and $37,151. During the three months ended March 31, 2025, we sold vehicles and trailers which cost $4,319,000 and had a net book value of $3,079,913 at a loss of $1,597,913. The proceeds of $1,482,000 from these sales was used to pay down our notes payable Note 5). Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service. Equipment that is temporarily not in service is not depreciated until placed into service.

Note 4. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

Schedule of accounts payable and accrued expenses
	March 31,		December 31,
	2025		2024
Accounts payable	$	41,774,338	$	27,793,637
Accrued interest (various notes and loans payable)		1,017,670		970,551
Accrued tax penalties and interest		837,477		837,477
Accounts payable and accrued expenses	$	43,629,485	$	29,601,665

Schedule of accounts payable and accrued expenses related parties
	March 31,		December 31,
	2025		2024
Accounts payable- related parties	$	2,321,673	$

SEC Form 10-Q filed by Vivakor Inc.