Vivakor, Inc.
For the period ended Dec 31, 2024. Filed Apr 15, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 15, 2025
VIVK$0.50+34.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-17.
0001829126-24-002582
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001829126-25-002687
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 80 current paragraphs.
31 unchanged; 18 reworded; 30 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
We have two operating business segments: (i) transportation logistics services and (ii) terminaling and storage facility product and services related to oil and gas production.
Current report
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, which are the most active regions for oil and natural gas exploration and development in the United States. On average, each new oil well in the Permian Basin produces approximately 1,300 barrels of crude oil or more per day. Those same wells produce approximately 10,000 barrels or more of produced water per day, historically considered a waste product. We utilize one of the largest combined oil and produced water trucking fleet in the United States to transport those products to a fully-integrated network of facilities where we blend various grades of crude oil, and reuse or dispose of produced water. Access to immediate, flexible, scalable transportation is a vital component of oil and natural gas exploration and development, as is the efficient takeaway, treatment, disposal, and/or reuse of commodities associated with oil and gas production. Transportation and terminaling of crude oil is also conducted utilizing our Omega Gathering Pipeline, which is an integrated approximately forty-five (45) mile crude oil gathering and pipeline in Blaine County, Oklahoma, in the heart of the STACK play. The line is tied into the Cushing, Oklahoma storage hub via the Plains STACK Pipeline. We also own and operate fifteen (15) crude oil pipeline injection truck stations, primarily centered in the Permian Basin.
Current report
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, and their operations should give our marketing division a key competitive advantage in sales of resulting blends in critical markets once that business is developed. These crude oil terminals are industrial facilities that serve as hubs for the storage, handling and distribution of crude oil and petroleum products.
Current report
In addition to our two operating business segments, 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. Last year we moved our other full-capacity RPC to Kuwait, where we are currently in negotiations with the Kuwaiti Oil Company to potentially use the RPC to clean sands contaminated with oil, primarily from oil wells destroyed during the Persian Gulf War.
Current report
Our website iswww.vivakor.com.
Current report
Results of Consolidated Operations
Current report
For the years ended December 31, 2024 and 2023, we realized operating expenses of $32,214,497 and $11,352,624, which represents an increase of $20,861,873, or 183.76%. Our operating expenses increased due to the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024, and impairment expense of $8,632,773, which was mainly attributed to an impairment loss of $7,047,179 for related to the impairment of our Kuwait RPCs and the impairment loss on our ancillary agreements, including the exclusive license agreement for the development and use of a nanosponge technology of $1,530,496 for the year ended December 31, 2024.
Current report
For the years ended December 31, 2024 and 2023, we realized a loss from operations of $21,995,293 and $6,331,660, which represents an increase of $15,663,633, or 247.39%. The increase in loss is attributed to the net effect of the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024, and the impairment loss of $7,047,179 on its Kuwait RPCs and impairment loss of $1,530,496 on the exclusive nanosponge license for the year ended December 31, 2024.
Current report
For the years ended December 31, 2024 and 2023, we realized interest expense of $4,816,692 and $4,025,077, which represents an increase of $791,615, or 19.67%. The increase in interest expense is mainly attributable to the net effect of the accrued interest on newly acquired debt from the close of the acquisition of the Endeavor Entities on October 1, 2024, and the amendment of our note issued as consideration in the 2022 MIPA approved by the shareholders on November 10, 2023. As the amendment was accounted for as a troubled debt restructuring under ASC 470 –Debt (“ASC 470”)*,*the note was thus written to the amount of the undiscounted future cash flows on the note to maturity, and therefore no interest expense is realized for the remainder of the note to maturity.
Current report
Noncontrolling interest
Current report
Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. The decrease in noncontrolling interest was due primarily related to the noncontrolling interest’s allocation of the impairment expenses noted above.
Current report
Segment Operating Results for the Years Ended December 31, 2024 and 2023
Current report
Operating Results of our Terminaling and Storage Segment:
Current report
Revenue
Current report
The increase in revenue is primarily attributed to the net effect of an increase in related party volumes purchased and processed at our Silver Fuels Delhi facility of approximately $8.1 million, and additional revenues of approximately $3.6 million from our newly acquired or newly formed entities related to the Endeavor Entities acquisition, which were acquired through our business combination, which closed on October 1, 2024.
Current report
Cost of Revenue
Current report
The increase in the cost of revenue is primarily attributed to the cost of goods sold related to the increase in related party volumes purchased and processed at our Silver Fuels Delhi facility, and additional costs of goods sold from our newly acquired or newly formed entities related to the Endeavor Entities acquisition, which were acquired through our business combination, which closed on October 1, 2024.
Current report
Our operating expenses increased due to the increase in amortization and depreciation from the acquired customer relationships and property and equipment from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Current report
Interest Expense
Current report
The increase in interest expense is attributed to newly acquired loans and notes payable assumed from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Current report
Operating Results of our Transportation Logistics Segment:
Current report
This operating segment in its entirety was acquired from our business combination acquisition of the Endeavor Entities’ businesses, which closed on October 1, 2024.
Current report
Operating Results of our Corporate and Other:
Current report
For information purposes, we have reported separately “Corporate and Other”, which is not determined to be an operating segment, but allows for analysis of non-operating entities and shared services and personnel that support both of the operating segments. Corporate and Other contains expenses for the corporate entity and non-operating entities, such as corporate overhead payroll expenses, stock-based compensation, corporate legal and audit expenses, impairment expense not related to operating segments, interest expense from loans at the corporate level, and amortization of intangible assets held at corporate and non-operating entities.
Current report
Our operating expenses increased due to the acquisition of the workforce of the Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024, including multiple new executives and administrative personnel, where stock based compensation increase approximately $1.3 million, and benefits, bonuses and new employee contracts increased approximately $500 thousand, and consultants and merger and acquisition expenses were approximately $900 thousand. The increase in our impairment expense was mainly attributed to an impairment loss of $7 million related to the impairment of our Kuwait RPCs and the impairment loss on our ancillary agreements, including the exclusive license agreement for the development and use of a nanosponge technology of $1,5 million.
Current report
Unrealized loss on marketable securities
Current report
Interest expense
Current report
The decrease in interest expense is mainly attributable to the amendment of our note issued as consideration in the 2022 MIPA approved by the shareholders on November 10, 2023. As the amendment was accounted for as a troubled debt restructuring under ASC 470 –Debt (“ASC 470”)*,*the note was thus written to the amount of the undiscounted future cash flows on the note to maturity in 2023, and therefore no interest expense is realized for the remainder of the note to maturity.
Current report
Noncontrolling interest
Current report
Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. The decrease in noncontrolling interest was due primarily related to the noncontrolling’s allocation of the impairment expenses noted above.
Removed paragraphs (12)
Previous report
Vivakor, Inc. 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 crude oil gathering, storage and transportation facilities, as well as contaminated soil remediation services.
Previous report
One of our facilities sells crude oil in amounts up to 60,000 barrels per month under agreements with a large energy company. A different facility owns a 120,000 barrel crude oil storage tank near Colorado City, Texas. The storage tank is presently connected to the Lotus pipeline system and we plan to further connect the tank to major pipeline systems.
Previous report
Our soil remediation services specialize in the remediation of soil and the extraction of hydrocarbons, such as oil, from properties contaminated by or laden with heavy crude oil and other hydrocarbon-based substances. Our patented process allows us to successfully recover the hydrocarbons which we believe could then be used to produce asphaltic cement and/or other petroleum-based products.
Previous report
Operating Expenses
Previous report
For the years ended December 31, 2023 and 2022, we realized operating expenses of $11,352,624 and $25,611,216, which represents a decrease of $14,258,592, or 55.67%. Our operating expenses decreased due to multiple substantial events and their associated expenses throughout 2022, including approximately $12,300,837 in impairment loss and bad debt expense, as discussed below.
Previous report
For the years ended December 31, 2023 and 2022, we realized an impairment loss of none and $11,138,830, which represents a decrease of $11,138,830 or 100%. Our impairment loss directly related to multiple events throughout 2022, including disruptions at our Vernal, Utah plant due to supply and personnel limitations, in which we realized an impairment loss of $447,124 on a license agreement with TBT Group and the possibilities of embedding self-powered sensors directly into the asphaltic cement we may generate from the Vernal, Utah RPC; After taking into consideration new information in 2022 related to the costs of building our own test facility or using new partners to test our ammonia synthesis catalyst, we realized an impairment loss of $3,254,999 to our ammonia synthesis assets; The operations surrounding our precious metals extraction services were suspended until 2022, although due to these suspended activities and a shift in 2022 of the Company’s focus to the oil and gas industry, we have realized an impairment loss $6,269,998 surrounding the extraction machinery, and we reserved further against our work-in-process precious metal concentrate in the amount of $1,166,709 as it had not been sold as anticipated in its concentrate form during 2022. In 2023 we agreed with TBT Group, Inc. to cancel the license agreement and both parties agreed to fully release and discharge any and all known and unknown claims they may have against the other party, with neither party owing the other party any money and TBT retaining the ownership of the piezo electric and energy harvesting technology that was the subject of the license agreement.
Previous report
For the years ended December 31, 2023 and 2022, we realized bad debt expense of none and $1,162,007, which represents a decrease of $1,162,007 or 100%. The decrease in bad debt expense is directly related to two note receivables. The first note receivable relates to the sale of 3,309,578 shares of marketable securities in December 2021 in a private transaction for a purchase price of $860,491, reflecting the market price as of such time. Such purchase price was paid in the form of $10,000 cash delivered at signing and a note issued in favor of Vivakor in the amount of $850,491 with payments due quarterly over a five-year term. The purchaser made their initial payment in the first quarter of 2022 but has not made further payments. The second note receivable is a $333,744 note receivable with TMC Capital, LLC, an affiliate of MCW Energy Group Limited. The parties amended their agreement in December 2021 to have the note paid on or before October 1, 2022, but we have not received payment. In 2022 we reserved against these notes in the amount of $828,263 and $333,744.
Previous report
Throughout 2022 we recognized increased professional services and compensation expenses, which relate to our registration statement, its amendments, preparing for and completing an underwritten public offering of our common stock, including our preparations and completion of an uplist of our common stock to a senior stock exchange, and two substantial acquisitions of SFD and WCCC. For example, for the years ended December 31, 2023 and 2022, we realized stock option expense of $2,064,466 and $4,079,591, which represents an decrease of $2,015,125, or 49.40% decrease.
Previous report
For the years ended December 31, 2023 and 2022, we realized amortization and depreciation expense of $3,932,744 and $2,953,629, which represents an increase of $979,115 or 33.15%. The increase in amortization and depreciation expense is primarily attributed to the amortization of our newly acquired contracts (see Note 13) and depreciation from our newly acquired property, plant and equipment held by SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022.
Previous report
For the years ended December 31, 2023 and 2022, we realized a loss from operations of $6,331,660 and $22,743,955, which represents a decrease of $16,412,295, or 72.16%. The decrease in loss is attributed to the net effect of the increase in gross profit and decrease in operating expenses discussed above.
Previous report
For the years ended December 31, 2023 and 2022, we realized interest expense of $4,025,077 and $1,519,281, which represents an increase of $2,505,796, or 164.93%. The increase in interest expense is mainly attributable to the $28,664,284 in notes payable issued as consideration for our newly acquired entities, SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022. The notes accrue interest of prime plus 3% on the outstanding balance of the notes. For the years ended December 31, 2023 and 2022, the Company accrued $2,993,121 and $1,126,429 in interest on these notes payable.
Previous report
There are no further existing firm obligations; however, we anticipate construction for each Nanosponge costs approximately $200,000, and we intend to manufacture and add a Nanosponge to our current RPCs.
Reworded paragraphs (18)
Previous wording
For the years ended December 31, 2023 and 2022, we realized revenues of $59,321,752 and $28,107,223, respectively, representing an increase of $31,214,529 or 111.06%. The increase in revenue is primarily attributed to our oil and natural gas liquid sales which have been realized through the operations from our newly acquired businesses in SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022.
Current wording
For the years ended December 31, 2024 and 2023, we realized revenues of $89,811,240 and $59,321,752, respectively, representing an increase of $30,489,488 or 51.40%. The increase in revenue is primarily attributed to the sales of logistics and terminaling realized through the operations of our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Previous wording
For the year ended December 31, 2023 and 2022, our cost of revenues consisted primarily of costs associated with selling oil and natural gas liquid through the operations from our newly acquired businesses in SFD and WCCC, which were acquired through our business combination which closed on August 1, 2022.
Current wording
For the year ended December 31, 2024 and 2023, our cost of revenues consisted primarily of costs associated with selling oil and natural gas liquid and through the operations from our newly acquired businesses in logistics, which were acquired through our business combination which closed on October 1, 2024.
Previous wording
For the years ended December 31, 2023 and 2022, costs of revenue were $54,300,788 and $25,239,962, respectively, representing an increase of $29,060,826 or 115.14%. The increase in the cost of revenue is primarily attributed to the cost of goods sold for our oil and natural gas liquid products realized through the operations from our newly acquired businesses in SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022.
Current wording
For the years ended December 31, 2024 and 2023, costs of revenue were $79,592,036 and $54,300,788, respectively, representing an increase of $25,291,248 or 46.58%. The increase in the cost of revenue is primarily attributed to the cost of goods sold for our logistics and terminaling realized through the operations from our newly acquired Endeavor Entities’ businesses, which were acquired through our business combination, which closed on October 1, 2024.
Previous wording
For the years ended December 31, 2023 and 2022, we realized gross profit of $5,020,964 and $2,867,261, respectively, representing an increase of $2,153,703 or 75.11%. For the year ended December 31, 2023 and 2022, the gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of our oil and natural gas liquid products.
Current wording
For the years ended December 31, 2024 and 2023, we realized gross profit of $10,219,204 and $5,020,964, respectively, representing an increase of $5,198,240 or 103.53%. For the years ended December 31, 2024 and 2023, the gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of our oil and natural gas liquid products.
Previous wording
Our operating expenses consist primarily of marketing, general and administrative expenses, bad debt expense, impairment loss, and amortization and depreciation expense. Marketing expenses include marketing fees of company representatives for marketing the business and its products and services as well as investor customer service. General and administrative expenses include professional services, including audit, tax, and legal fees associated with the costs for services in finance, accounting, administrative activities and the formation and compliance of a public company. Bad debt expense includes the expense associated with assets that management analyses and estimates may be uncollectible. Impairment loss includes the expense associated with events or changes in circumstances that indicate the carrying amount of an asset 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. Amortization and depreciation expense uses the useful life of the asset to calculate the amortization or depreciation expense in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and management’s judgment.
Current wording
Our operating expenses consist primarily of marketing, general and administrative expenses, impairment loss, and amortization and depreciation expense. Marketing expenses include marketing fees of company representatives for marketing the business and its products and services. General and administrative expenses include professional services, including audit, tax, and legal fees associated with the costs for services in finance, accounting, administrative activities and the formation and compliance of a public company. Impairment loss includes the expense associated with events or changes in circumstances that indicate the carrying amount of an asset 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. Amortization and depreciation expense uses the useful life of the asset to calculate the amortization or depreciation expense in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and management’s judgment.
Previous wording
For the years ended December 31, 2023 and 2022, we reported an unrealized loss of $1,156,928 and $578,464 on marketable securities, which represents an increase in the unrealized loss of $578,464, or 100%. Our marketable securities were considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized losses as noted above.
Current wording
For the years ended December 31, 2024 and 2023, we reported an unrealized gain of $165,275 and an unrealized loss of $1,156,928 on marketable securities, which represents an increase in the unrealized gain of $1,322,203, or 114.29%. Our marketable securities were considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gain as noted above.
Previous wording
The Company recorded an income tax benefit (provision) of (92,703) and $4,436,691 for the years ended December 31, 2023 and 2022, respectively. The Company’s effective tax rate for 2023 and 2022 was -0.88% and 18.69%, which was the result of the (provision) or benefit of book income/losses offset by an additional valuation allowance on the net operating losses.
Current wording
The Company recorded an income tax provision of $126,869 and 92,703 for the years ended December 31, 2024 and 2023, respectively. The Company’s effective tax rate for 2024 and 2023 was -0.57% and -0.88%, which was the result of the (provision) or benefit of book income/losses offset by an additional valuation allowance on the net operating losses.
Previous wording
We have historically suffered net losses and cumulative negative cash flows from operations and, as of December 31, 2023 and 2022, we had an accumulated deficit of approximately $65.9 million and $55.2 million. As of December 31, 2023 and 2022, we had a working capital deficit of approximately $34.9 million and $3.77 million, respectively.
Current wording
We have historically suffered net losses and cumulative negative cash flows from operations and, as of December 31, 2024 and 2023, we had an accumulated deficit of approximately $99 million and $65.9 million. As of December 31, 2024 and 2023, we had a working capital deficit of approximately $101.5 million and $34.9 million, respectively.
Previous wording
As of December 31, 2023 and 2022, we had cash and cash equivalents of $744,307 and $3,182,793, with none and $81,607 attributed to variable interest entities, respectively.
Current wording
As of December 31, 2024 and 2023, we had cash and cash equivalents of $3.7 million and $744,307, which includes $3 million and none as restricted cash, respectively.
Previous wording
To date we have financed our operations primarily through debt financing, private equity offerings and our working interest agreements, although on February 14, 2022, the Company closed an underwritten public offering of 1,600,000 shares of common stock, at a public offering price of $5.00 per share, for aggregate net proceeds of $6.2 million, after deducting underwriting discounts, commissions, and other offering expenses. The Company’s Common Stock began trading on the Nasdaq Capital Market under the symbol “VIVK”.
Current wording
To date we have financed our operations primarily through debt financing, private equity offerings. The Company’s Common Stock began trading on the Nasdaq Capital Market under the symbol “VIVK”.
Previous wording
For the years ended December 31, 2023 and 2022, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $10,835,275 and $20,247,621, a $88,323 and $(4,437,492) related to our provision for income taxes and the net effect on deferred tax liabilities (deferred tax assets), our depreciation and amortization of $3,932,744 and $2,953,629, an impairment loss of none and $11,138,830, a bad debt expense of none and $1,162,007, a gain on the deconsolidation of a variable interest entity of $438,099 and none, a decrease in accounts receivable of $930,893 and $2,613,278, a decrease in accounts payable of $366,592 and $3,408,157, an increase in other assets of $417,890 and $80,220. For the years ended December 31, 2023 and 2022, we were also able to issue stock for services of none and $1,472,888, and stock-based compensation of $1,597,881 and $2,606,703 in lieu of using cash. We also realized interest expense on loans and notes payable of $3,476,577 and $1,454,752 related to the original $28,664,284 in notes payable issued as consideration for our newly acquired entities, SFD and WCCC, which were acquired through our business combination, which closed on August 1, 2022. For the years ended December 31, 2023 and 2022, we also realized an unrealized loss of $1,156,928 and $578,464 on marketable securities as described above.
Current wording
For the years ended December 31, 2024 and 2023, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $26,350,925 and $10,835,275, a $66,058 and $88,323 related to our provision for income taxes and the net effect on deferred tax liabilities, our depreciation and amortization of $11,360,425 and $3,932,744, an impairment loss of $8,632,773 and none, a gain on the deconsolidation of a variable interest entity of none and $438,099, an increase in accounts receivable of $5,116,717 and an decrease of $930,893, a decrease of $7,488,301 and increase of $366,592 in accounts payable, an increase in other assets of $2,184,691 and $417,890. For the years ended December 31, 2024 and 2023, we were also able to issue stock for services of $19,998 and none, and stock-based compensation of $2,551,959 and $1,597,881 in lieu of using cash. We also realized interest expense on loans and notes payable of $4,816,692 and $3,476,577 related newly acquired debt from the Endeavor Entities, which were acquired through our business combination, which closed on October 1, 2024. For the years ended December 31, 2024 and 2023, we also realized an unrealized gain of $165,275 and an unrealized loss of $1,156,928 on marketable securities as described above.
Previous wording
For the years ended December 31, 2023 and 2022, our net cash used in investing activities was mainly attributed to our purchase of equipment of $3,320,918 and $2,491,175 related to the manufacturing of our RPCs and wash plant facilities. The Company also reported $210, 862 of notes receivable assumed and a decrease in $181,509 of cash and cash equivalents in the deconsolidation of a variable interest entity and as of December 31, 2023.
Current wording
For the years ended December 31, 2024 and 2023, our net cash used in investing activities was mainly attributed to the following: Our purchase of equipment of $4,539,882 and $3,320,918 related to the manufacturing of our RPCs, wash plant and pipeline facilities. The Company also reported $210,862 of notes receivable assumed and a decrease in $181,059 of cash and cash equivalents in the deconsolidation of a variable interest entity and as of December 31, 2023. We also acquired cash of $4,842,070 from the Endeavor Entities acquisition, which we acquired through our business combination, which closed on October 1, 2024.
Previous wording
For the years ended December 31, 2023 and 2022, we received proceeds of $2,944,697 and $3,640,046 related to the issuance of notes and other loans. We also received proceeds of $6,240,000 from our February 14, 2022 underwritten public offering of 1,600,000 shares of common stock. For the years ended December 31, 2023 and 2022, we paid down notes payable and related party notes payable by $470,160 and $853,230 and made distributions to Viva Wealth Fund I, LLC unit holders of none and $861,691. For the years ended December 31, 2023 and 2022, we paid down finance lease liabilities by $446,782 and $429,578.
Current wording
For the years ended December 31, 2024 and 2023, we received proceeds of $7,509,701 and $2,956,197 related to the issuance of notes and other loans, which includes proceeds of $1,664,150 and $11,500 from related parties. For the years ended December 31, 2024 and 2023, we paid down notes payable and related party notes payable by $6,111,208 and $470,160. For the years ended December 31, 2024 and 2023, we paid down finance lease liabilities by $2,003,823 and $446,782. For the year ended December 31, 2024 we received proceeds of $1,425,000 from the sale of our common stock.
Previous wording
We have historically suffered net losses and cumulative negative cash flows from operations, and as of December 31, 2023, we had an accumulated deficit of approximately $65.9 million. As of December 31, 2023 and 2022, we had a working capital deficit of approximately $34.9 million and $3.77 million, respectively. As of December 31, 2023, we had cash of approximately $744,000. In addition, we have obligations to pay approximately $18.1 million of debt within one year of the issuance of these financial statements. Of the $18.1 million, $15.3 million can be satisfied through the issuance of registered common stock under the terms of the debt. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Current wording
We have historically suffered net losses and cumulative negative cash flows from operations, and as of December 31, 2024, we had an accumulated deficit of approximately $99 million. As of December 31, 2024 and 2023, we had a working capital deficit of approximately $101.5 million and $34.9 million, respectively. As of December 31, 2024, we had cash of approximately $3.7 million, of which $3 million is restricted cash. In addition, we have obligations to pay approximately $61 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.
Previous wording
During the year ended December 31, 2023, subject to available cash flows, the Company continued to develop its technologies, its strategy to monetize its intellectual properties and execute its business plan. To date we have financed our operations primarily through debt financing, private and public equity offerings and our working interest agreements. For the fiscal year 2023 we raised approximately $3 million through debt financings with individual investors, $2.2M through a sale lease back agreement, and subsequent to year end we raised an additional $3 million through additional debt financing (Note 22). The Company entered into merger and acquisition agreements with anticipated closing dates in 2024 (Note 22). Even though these merger and acquisition transactions are projected to close in 2024 and yield substantial cash flow that may provide adequate working capital to finance its day-to-day operations and current obligations, these events were not considered probable as of December 31, 2023 because they have not closed as of the date of our filing.
Current wording
During the year ended December 31, 2024, subject to available cash flows, the Company continued its strategy to monetize its intellectual properties and execute its business plan, including the acquisition of the Endeavor Entities. To date we have financed our operations primarily through debt financing, and private and public equity offerings.
Previous wording
Our contractual obligations as of December 31, 2023 for finance lease liabilities are for the sale and leaseback of certain land, property, plant, and equipment that were acquired in the closing of our business combination, which acquired SFD and WCCC on August 1, 2022, which leases end in 2025 and 2026. Finance lease obligations as of December 31, 2023 are as follows:
Current wording
Our contractual obligations as of December 31, 2024 for finance lease liabilities are for certain land, property, plant, and equipment that were acquired in the closing of our business combination, which acquired the Endeavor Entities on October 1, 2024, which leases end in 2025 and 2026. Finance lease obligations as of December 31, 2024 are as follows:
Previous wording
Our contractual obligations as of December 31, 2023 for operating lease liabilities are for office and warehouse space, which leases end in 2024 and 2025, and a land lease which ends in 2042. Operating lease obligations as of December 31, 2023 are as follows:
Current wording
Our contractual obligations as of December 31, 2024 for operating lease liabilities are for office warehouse space, land, and truck yards, which leases end in 2026 through 2027, except for a land lease which ends in 2042. Operating lease obligations as of December 31, 2024 are as follows:
Previous wording
Interest rate risk is the potential for reduced net interest income and other rate-sensitive income resulting from adverse changes in the level of interest rates. We do not have variable interest rate-sensitive income agreements. We do have financing arrangements that were issued on August 1, 2022 as consideration for the business combination and acquisition of SFD and WCCC, in which the three-year notes have variable interest rates based on the prime rate, which exposes us to further interest expense if the prime rate increases. We believe that the LIBOR is being phased out globally and do not have any financings with variable interest rates based on the LIBOR.
Current wording
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 arrangement, in which notes have variable interest rates based on the prime rate, which exposes us to further interest expense if the prime rate increases.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our marketable securities are considered to be traded on an active market and were accounted for at a fair value based on the quoted prices in the active markets resulting in aggregate unrealized gains as noted above.