Vivakor, Inc.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
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.
FY2025 · Filed Apr 15, 2026
VIVK$0.50+34.1%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001829126-25-002687
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001829126-26-003530
Item 1A. Risk FactorsThe 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 136 previous paragraphs and 122 current paragraphs.
44 unchanged; 27 reworded; 50 added; 64 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 20 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 (50)
Current report
Any reduction or delay in such development activity could reduce throughput, limit utilization of our assets, and adversely affect our revenues and results of operations.
Current report
In addition, the customer agreements we enter into and the petroleum commodities we sell are substantially dependent on drilling, completion, and production activity by producers near our facilities and transportation assets. A significant portion of our revenue is derived from Jorgan Development, LLC (“Jorgan”), which is controlled by our Chief Executive Officer and director, James Ballengee**.** Any slowdown in producer activity or a change in Jorgan’s business operations could negatively impact our results of operations, cash flows, and financial position.
Current report
Our revenues are sensitive to fluctuations in oil and natural gas prices.
Current report
Our revenues and results of operations are significantly influenced by market prices for oil and natural gas, which are volatile and largely beyond our control. A sustained decline or significant fluctuation in commodity prices could reduce drilling, completion, and production activities by producers on or near our facilities, which in turn could decrease throughput, utilization of our assets, and revenues from marketing activities.
Current report
Factors that may affect oil and natural gas prices include, among others:
Current report
Prolonged periods of low oil and natural gas prices may lead producers to reduce or delay drilling and production, shut-in wells, or abandon marginal assets, which could materially and adversely affect demand for our services and our financial condition, results of operations, and cash flows.
Current report
Our business is closely tied to the oil and gas industry, which is subject to substantial volatility. Fluctuations in the price of crude oil and natural gas, as well as changes in supply, demand, and market margins, can materially and adversely affect our revenues, operations, and cash flows. Low prices or reduced demand for oil and gas could reduce customer investment in drilling and production, limit demand for our services and products, and adversely impact our financial results.
Current report
Our operations are also subject to the hazards inherent in the oil and gas industry, including equipment failures, vehicle accidents, fires, explosions, blowouts, pipeline failures, oil spills, and exposure to hazardous substances. In addition, natural disasters, such as blizzards, storms, floods, earthquakes, and other adverse weather events, could damage our assets, disrupt operations, and result in environmental or regulatory liabilities. These events could increase operating costs, affect insurability, harm our reputation, or lead customers to reduce or terminate their use of our services.
Current report
While we maintain insurance coverage, it may be inadequate to cover all potential losses or liabilities. Certain policies may have sub-limits, exclusions, or escalating premiums, and we may be unable to obtain desired coverage at reasonable rates. If we incur significant losses that are not fully insured, or fail to meet insurance requirements, our financial condition, results of operations, and cash flows could be materially and adversely affected.
Current report
A substantial portion of our assets and operations are concentrated in the Permian and Eagle Ford Basins of Texas and New Mexico. This geographic concentration exposes us and our customers to regional supply and demand fluctuations, production delays, transportation or processing constraints, natural disasters, adverse weather, water shortages, and regulatory or political developments. Such concentration may magnify the impact of these risks and could adversely affect our operations, revenues, and financial performance.
Current report
Finally, the oil and gas industry is highly competitive. Our prospective customers may include companies with greater financial, operational, and technical resources than our customers and lessees. Competitive factors in the industry include price, delivery reliability, methods, and efficiency. Failure to remain competitive could reduce our customer base and materially and adversely affect our business, financial condition, results of operations, and cash flows.
Current report
We may also face challenges in making attractive acquisitions or integrating acquired assets and facilities, which could limit our growth prospects.
Current report
We intend to grow our business partly through revenues and contracts tied to newly constructed facilities. Construction projects involve regulatory, environmental, political, and legal uncertainties, including opposition from environmental groups, local communities, and other stakeholders. Such opposition may result in delays or denials of permits, organized protests, regulatory challenges, lawsuits, or attempts to disrupt or sabotage operations.
Current report
There can be no assurance that facilities will be developed at all, completed on schedule, or constructed at economical cost, and anticipated benefits may not materialize. Technical difficulties during construction may reduce capacity or shorten the useful life of assets. Expansion projects may fail to attract sufficient demand or new customers, potentially limiting expected returns and adversely affecting our results of operations, cash flows, and financial position.
Current report
Acts of sabotage or eco-terrorism could cause damage, injury, environmental harm, or operational interruptions. Government authorities exercise discretion in permit timing and scope, and public intervention may further delay approvals. Negative public perception could restrict our customers’ ability to operate profitably, which in turn could reduce usage of our existing transportation and facilities assets and hinder future development. Any such events, or expenditures not covered by insurance, could materially impact our revenue and financial performance.
Current report
Because we rely on a limited number of key employees who are instrumental to our ability to conduct and grow our business, the loss of any of these individuals could materially and adversely affect our ability to successfully operate and expand our business.
Current report
We may have difficulty raising additional capital when needed, and any such financing could result in dilution to existing stockholders or the issuance of securities with rights, preferences, or privileges that are senior to those of our common stock, which could materially and adversely affect existing stockholders.
Current report
We have identified material weaknesses in our internal control over financial reporting, and any failure of these controls could prevent accurate financial reporting or fraud prevention and materially undermine investor confidence in our common stock.
Current report
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires us to maintain effective internal control over financial reporting. All internal control systems, however well designed, have inherent limitations and can provide only reasonable assurance that financial reporting objectives are met. If we fail, or are perceived to fail, in producing reliable financial reports, investors could lose confidence in our reported results, which could negatively affect the market price of our common stock.
Current report
These control deficiencies, which are pervasive in nature, result in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis.
Current report
We are taking steps to address these material weaknesses, including hiring additional personnel and strengthening our financial reporting processes. However, there can be no assurance that material weaknesses will not occur in the future.
Current report
If new material weaknesses are identified, or if we fail to comply with Section 404 requirements, we may be unable to assert that our internal control over financial reporting is effective. This could result in delayed filings, loss of investor confidence, negative impacts on our stock price, regulatory investigations, or litigation, any of which could materially and adversely affect our business, financial condition, results of operations, and reputation.
Current report
Because we are required to obtain and maintain a variety of permits to operate our business, failure to successfully obtain or maintain such permits could materially and adversely affect our operations.
Current report
Because we and our customers are subject to numerous domestic and international governmental regulations, our continued success depends on our ability to comply with these requirements.
Current report
For the year ended December 31, 2025, approximately 23% of our total revenues was generated from one major customer, who was a related party. In addition, we rely on a limited number of customers across our crude oil transportation, terminaling and storage, marketing and trading, and remediation segments. Many of our contracts do not include minimum volume commitments, and demand from these customers may fluctuate due to factors beyond our control. The loss of any major customer, a reduction in volumes, or the inability to renew or replace contracts due to competition, credit issues, or other factors could materially and adversely affect our revenues, results of operations, cash flows, and financial condition.
Current report
Our RPCs and related remediation services are at an early stage of operations, and their success is subject to the substantial risks inherent in establishing a new business venture. We may be unable to successfully commission our RPCs, secure contracts for remediation services, or begin operations as planned. Delays or difficulties in commissioning, operational interruptions, or the need to relocate facilities could result in substantial losses.
Current report
The construction and operation of the RPCs involve risks related to specialized manufacturing equipment, plant operations, and external factors beyond our control, including adverse weather, strikes, energy shortages, cost inflation, environmental conditions, and legal or regulatory matters. Damage, destruction, or malfunction of critical equipment could impair our ability to commence or continue operations, and cost overruns, changes in design, or additional compliance requirements could increase capital and operating expenses, negatively affecting our financial condition and results of operations.
Current report
We also have significant contractual obligations, including land and equipment leases, which could be adversely affected if commissioning or operations are delayed or unsuccessful. Moreover, our RPC services, including soil remediation and the extraction and sale of hydrocarbons recovered from contaminated properties, may not prove commercially successful. Any of these risks could materially and adversely impact our business, results of operations, cash flows, and financial condition.
Current report
We face competition across each of our business lines. In crude oil transportation, terminaling, and storage, we compete with numerous midstream operators, including large integrated companies with extensive pipeline networks and tank farms, greater financial resources, and the ability to offer more favorable terms. In our marketing and trading activities, we compete with well-capitalized integrated energy companies that benefit from broader trading platforms, established market relationships, and stronger credit profiles. In our remediation segment, once the RPC becomes operational, we expect competition from established waste treatment, recycling, and environmental service providers, as well as from alternative technologies that oil producers may adopt to reduce costs and from industries seeking substitutes to oil and gas.
Current report
The markets in which we operate are highly competitive and subject to rapid change. Many of our competitors benefit from stronger brand recognition, deeper customer relationships, and greater financial and operational resources, which allow them to adapt more quickly to changing conditions, pursue opportunities more aggressively, and allocate more to marketing, sales, and pricing initiatives. These competitive pressures could limit our ability to attract and retain customers and could adversely affect our business, financial condition, and results of operations.
Current report
Our business involves litigation risk, and we are currently involved in litigation that may impact our business.
Current report
The crude oil transportation and marketing business is capital- and regulatory-intense, and involves a substantial risk of litigation. We are currently involved in material litigation. While we endeavor to vigorously defend all claims against us, there is a risk that the outcomes or any or all of our current or future litigation may have a material adverse impact on our business, financial condition, results of operations, and cash flows.
Current report
Business operations could be materially affected if key components are unavailable or supplier production is delayed.
Current report
Our ability to manufacture, maintain, and repair our facilities and transportation assets, as well as produce and market our products, depends on timely access to certain key components, some of which are available only from limited third-party suppliers. If these components become unavailable, are delayed, or cannot be acquired at competitive prices, our operations could be disrupted. The loss of a key supplier, or delays in obtaining shipments, could adversely affect our ability to meet contractual obligations, cause a loss of sales, and have a material adverse effect on our business, financial condition, and results of operations.
Current report
Any shortage of skilled labor or inability to secure qualified third-party contractors could materially disrupt our operations and adversely affect our business.
Current report
Our future growth may place demands on our financial, operational, and human resources, which could negatively affect our results of operations, cash flows, and financial position. Our ability to grow depends, in part, on our ability to attract, retain, and deploy skilled personnel. Any shortage of skilled labor could adversely impact productivity, increase costs, and limit our ability to expand production to meet demand.
Current report
While none of our employees are currently unionized, future employees may seek union representation or collective bargaining agreements. Unionization could increase labor costs, reduce productivity, and raise the risk of work stoppages. Any work stoppage could disrupt operations and materially and adversely affect our business, financial condition, results of operations, and cash flows.
Current report
Future acquisitions may fail, be costly, or difficult to integrate, which could materially harm our business and stock value.
Current report
Our ability to grow and execute our core business operations may be limited.
Current report
Following the sale of certain non-core assets, our primary focus is on crude oil transportation, facilities services, marketing and trading, and remediation. While we intend to expand these operations, there can be no assurance that we will be successful in doing so. If we are unable to effectively execute our strategies, compete with larger market participants, or expand into new opportunities, our business plans, financial condition, and revenue growth could be materially and adversely affected.
Showing the first 40 of 50 passages. Open the source sections for the rest.
Removed paragraphs (64)
Previous report
The customer agreements we enter into and the petroleum commodities we sell in the marketplace are substantially dependent on drilling, completion and production activities by exploration and production companies near and around our facilities and transportation assets. Similarly, the revenues we earn from White Claw Crude, LLC (“WC Crude” or White Claw”) are substantially dependent on those same activities. White Claw Crude is controlled by James Ballengee, our Chief Executive Officer and member of our Board of Directors. If exploration and production companies do not maintain such activities near our facilities and transportation assets, their demand for the use of assets and transportation logistics services will decline, negatively impacting our results of operations, cash flows and financial position.
Previous report
Demand for the use of our assets, as well as the revenues provided by White Claw, depends substantially on capital spending by producers to develop and produce oil and natural gas in the area. These expenditures are generally dependent on such producers’ overall financial position, capital allocation priorities and ability to access capital, and their views of future demand for, and prices of, oil and natural gas. Volatility in oil or natural gas prices (or the perception that oil or natural gas prices will decrease) affects such producers’ capital expenditures and willingness to pursue development activities. This, in turn, could lead to lower demand for the use of our assets and services, delays in payment of, or nonpayment of, amounts that are owed to us and cause lower rates and lower utilization of our transportation assets, facilities, and may negatively impact our marketing activities. For additional information, please see below,The willingness of exploration and production companies to engage in drilling, completion and production activities on and around our land is substantially influenced by the market prices of oil and natural gas, which are highly volatile. A substantial or extended decline in oil and natural gas prices may adversely affect our results of operations, cash flows and financial position.
Previous report
For the year ended December 31, 2024, on an actual basis, we and the Endeavor Entities received approximately 75.76% of our total revenues from two major customers. While we expect these revenue streams to be recurring, our contracts with our significant customers, which represent a large portion of our revenues, typically do not contain minimum volume commitment provisions for transportation or processing of petroleum commodities or produced water volumes handled. As a result, our revenues are dependent on ongoing demand from these customers, which may decrease due to factors beyond our control. Our producer customers make all decisions as to investments in, and production from, their wells, and our revenues are dependent upon decisions made by such producers, among other factors. For example, we cannot control whether a producer chooses to develop a property or the success of drilling and development activities, which depend on a number of factors under the control of such producer. There can be no assurance that such producers will take actions or make decisions that will be beneficial to us, which could result in adverse effects on our results of operations, cash flows and financial position.
Previous report
The willingness of exploration and production companies to engage in drilling, completion and production activities near our facilities and transportation assets is substantially influenced by the market prices of oil and natural gas, which are highly volatile. A substantial or extended decline in oil and natural gas prices may adversely affect our results of operations, cash flows and financial position.
Previous report
Market prices for oil and natural gas are volatile and a decrease in prices could reduce drilling, completion and production activities by producers on or around our land, resulting in a reduction in the use of transportation and facilities services, as well as the amount of revenues we receive from marketing activities. The market prices for oil and natural gas are subject to U.S. and global macroeconomic and geopolitical conditions, among other things, and, historically, have been subject to significant price fluctuations and may continue to change in the future. Prices for oil and natural gas may fluctuate widely in response to relatively minor changes in supply and demand, market uncertainty and a variety of additional factors that are beyond our control and the control of producers on or around our land, such as:
Previous report
These factors have at times resulted in, and may in the future result in, a reduction in global economic activity and volatility in the global financial markets and make it extremely difficult to predict future oil and natural gas price movements with certainty. A sustained decline in oil and natural gas prices may reduce the amount of oil and natural gas that can be produced economically by producers on or around our land, which may reduce such producers’ willingness to develop such land and hire our transportation assets and facilities services. Producers near or around our transportation assets and facilities could also determine during periods of low oil and natural gas prices to shut-in or curtail production from wells on such land, or plug and abandon marginal wells that otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices. The scale and duration of the impact of these factors cannot be predicted but could lead to an increase in our customers’ operating costs or a decrease in our or our customers’ revenues, and any substantial decline in the price of oil and natural gas or prolonged period of low oil and natural gas prices may materially and adversely affect our results of operations, cash flows and financial position.
Previous report
We may also be unable to make attractive acquisitions, which could inhibit our ability to grow, or we could experience difficulty commercializing any acquired assets or facilities. It may be difficult to identify attractive acquisition opportunities and, even if such opportunities are identified, our existing and/or future debt agreements contain, or may contain, limitations on our ability to enter into certain transactions, which could limit our future growth.
Previous report
We intend to grow our business through revenues and contracts tied to newly-constructed facilities. Facility construction projects involve numerous regulatory, environmental, political and legal uncertainties, including political opposition by environmental groups, local groups and other advocates. Such opposition can take many forms, including the delay or denial of required governmental permits, organized protests, attempts to block or sabotage our operations, intervention in regulatory or administrative proceedings related to our permitting efforts or otherwise involving their assets, or lawsuits or other actions designed to prevent, disrupt or delay the operation of our assets or their business. There can be no assurance that such infrastructure will be developed at all or that we will complete these projects on schedule or at an economical cost, and we may not realize the anticipated benefits of such projects.
Previous report
We may also encounter technical difficulties during the construction of such infrastructure leading to a reduction in capacity or a shorter useful life. Moreover, we may undertake expansion projects to capture anticipated future growth that does not materialize or for which they are unable to acquire new customers. As a result, the new facilities and infrastructure developed by us may not be able to attract enough demand to achieve their expected investment return, which could materially and adversely affect our results of operations, cash flows and financial position.
Previous report
In addition, acts of sabotage or eco-terrorism could cause significant damage or injury to people, property or the environment or lead to extended interruptions of operations. Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts. Negative public perception could cause the permits our customers require to conduct their operations to be withheld, delayed or burdened by requirements that restrict our customers’ ability to profitably conduct their business. Any such event that delays or otherwise interrupts the revenues generated by our operations, or which causes us to make significant expenditures not covered by insurance, could adversely affect our revenue in respect of use of existing transportation and facilities assets as well as our future development of facilities.
Previous report
Technological advancements in connection with alternatives to hydraulic fracturing could decrease the demand for our produced water sales and the Endeavor Entities’ produced water transportation and handling operations.
Previous report
Wide-scale development of techniques to recycle produced water for use in completion activities or otherwise could adversely affect the amount of produced water transported to and handled by our transportation fleet, which could materially and adversely affect our results of operations, cash flows and financial position. Some exploration and production companies are focusing on developing and utilizing non-water fracturing techniques, including those utilizing propane, carbon dioxide or nitrogen instead of water. If producers in the Permian and Eagle Ford Basins begin to shift their fracturing techniques to waterless fracturing in the development of their wells, our produced water transportation business could be materially and negatively impacted.
Previous report
Our RPC services will be at an early operational stage after operations commence, and the success of these services is subject to the substantial risks inherent in the establishment of a new business venture.
Previous report
Our RPC services will be in an early operational stage after operations commence, and our initial operations will focus on the remediation of soil and the extraction of hydrocarbons, such as oil, from properties contaminated by or laden with heavy crude oil and hydrocarbon-based substances. Thereafter, we plan for the second stage of our operational strategy related to our RPCs, which involves the selling the asphaltic cement and/or other petroleum-based products we are able to produce from the hydrocarbons we recover.
Previous report
Our services related to our RPCs may not prove to be successful. We currently have two RPCs in Kuwait but neither are presently engaged in remediation operations and we have fully-impaired the value of these two RPCs in our financial statements as of December 31, 2024. We will need to deploy these two RPC and scale our remediation business beyond these two RPCs and demonstrate that our scaled-up recovery and remediation business can be profitable. Any future success that we may enjoy related to our RPC business will depend on many factors, some of which may be beyond our control, and others which cannot be predicted at this time.
Previous report
We rely upon a few, select key employees who are instrumental in our ability to conduct and grow our business. In the event any of those key employees would no longer be affiliated with the Company, it may have a material detrimental impact as to our ability to successfully operate our business.
Previous report
We may have difficulty raising additional capital, which could deprive us of necessary resources, and you may experience dilution or subordinate stockholder rights, preferences and privileges as a result of our financing efforts.
Previous report
Our business plan includes operating internationally, which subjects us to a number of risks.
Previous report
Our strategic plans include international operations, such as our projects in the Middle East. We intend to use our proprietary RPC technology system and develop, construct and potentially sell our RPC system in international locations. Risks inherent to international operations include the following:
Previous report
If we identify new material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting (if and when required), we may be late with the filing of our periodic reports, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. As a result of such failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business, and would have a material adverse effect on our business, financial condition and results of operations.
Previous report
Our operations are exposed to the risks inherent to our industry, such as equipment defects, vehicle accidents, fires, explosions, blowouts, pipe or pipeline failures, and various environmental hazards, such as oil spills and releases of, and exposure to, hazardous substances. For example, our operations are subject to risks associated with storage and handling of oil, including any mishandling or surface spillage. In addition, our operations are exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and penalties or other damage resulting in curtailment or suspension of our operations. The cost of managing such risks may be significant. The frequency and severity of such incidents will affect operating costs, insurability and relationships with customers, employees and regulators. In particular, our customers may elect not to purchase our product if they view our environmental or safety record as unacceptable, which could cause us to lose customers and revenues.
Previous report
Our insurance may not be adequate to cover all losses or liabilities we may suffer. Furthermore, we may be unable to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums and deductibles for certain of our insurance policies have increased and could escalate further. In addition, sub-limits have been imposed for certain risks. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we are not fully insured, it could have a material adverse effect on our business, results of operations and financial condition. In addition, we may not be able to secure additional insurance or bonding that might be required by new governmental regulations. This may cause us to restrict our operations, which might severely impact our financial position.
Previous report
Additionally, we may not have coverage if we are unaware of the pollution event and unable to report the “occurrence” to our insurance company within the time frame required under our insurance policy. In addition, these policies do not provide coverage for all liabilities, and the insurance coverage may not be adequate to cover claims that may arise, or we may not be able to maintain adequate insurance at rates we consider reasonable. A loss not fully covered by insurance could have a material adverse effect on our financial position, results of operations and cash flows.
Previous report
While we have positions in every major oil and natural gas-producing basin in the contiguous lower 48 states, our assets are disproportionately located in the Permian and Eagle Ford Basins of Texas and New Mexico, making us vulnerable to risks associated with geographic concentration in those areas. In particular, we and our customers may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from oil and natural gas wells in this area, availability of equipment, facilities, personnel or services, market limitations, governmental regulation and political activities, processing or transportation capacity constraints, natural disasters, adverse weather conditions, water shortages or other drought related conditions or interruption of the processing or transportation of oil and natural gas. In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as the South Karnes Trough or the Delaware Basin, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions.
Previous report
We require a variety of permits to operate our business. If we are not successful in obtaining and/or maintaining those permits it will adversely impact our operations.
Previous report
We, and our customers and prospective customers, are subject to numerous governmental regulations, both domestically and internationally. In order to operate successfully we must be able to comply with these regulations.
Previous report
We currently have a limited number of customers for our crude oil gathering, transportation and terminaling services and our RPC services. The failure to obtain additional customers or the loss of all or a portion of the revenues attributable to any current or future customer as a result of competition, creditworthiness, inability to negotiate extensions or replacement of contracts or otherwise could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Previous report
If our customers do not enter into, extend or honor their contracts with us, our profitability could be adversely affected. Our ability to receive payment for production depends on the continued solvency and creditworthiness of our customers and prospective customers. If any of our customers’ creditworthiness suffers, we may bear an increased risk with respect to payment defaults. If customers refuse to accept our equipment or make payments for which they have a contractual obligation, our revenues could be adversely affected. In addition, if a substantial portion of our contracts are modified or terminated and we are unable to replace the contracts (or if new contracts are priced at lower levels), our results of operations will be adversely affected.
Previous report
In the event we are not able to successfully set up and/or refurbish our RPCs located in Kuwait or obtain a contract for remediation services in the area to be able to operate we could incur substantial losses from those operations and in then having to potentially move the RPCs to another location due to those losses.
Previous report
Under our agreement with Maxus Capital Group, LLC (“Maxus”), we are building out a facility on land we lease near Houston, Texas and are obligated to pay Maxus approximately $58,000 per month for four years. In the event we are not able to complete the facility and commence remediation operations we could default on our obligation to Maxus, which could cause us substantial losses.
Previous report
The current Israeli/Hamas conflict could impact our ability to operate in the Middle East in the future.
Previous report
Any escalation in the current Israeli/Hamas conflict could involve additional Middle East countries and could impact our ability to operate our RPCs located in Kuwait in the future, which could have a material impact on our Middle East projects and our ability to monetize those projects in the future.
Previous report
Because a significant portion of our future revenue growth is expected to be derived from WC White Claw, any development that materially and adversely affects their business, operations or financial condition could have a material adverse impact on us.
Previous report
WC Crude is anticipated to be, among our most significant customers and is expected to play an increasingly important role in our financial performance over the long term. Accordingly, we are indirectly subject to the business risks faced by WC Crude. Because a significant portion of our revenues is derived from WC Crude, any development that materially and adversely affects WC Crude’s businesses, operations or financial condition could have a material adverse impact on us.
Previous report
In addition, if WC Crude is unable to enter into favorable commodity marketing contracts or to obtain the necessary trade credit on favorable terms, it may not be able to perform its obligations as anticipated, or at all, which could negatively affect our results of operations, cash flows and financial position.
Previous report
In the crude oil gathering, storage and transportation business many of our competitors are large tank farm businesses and if one or more of them built storage tanks and/or facilities near our current facilities they could compete with us for business at our current location. As larger companies, they have greater resources than we do to compete for business in our area and may be able to price us out of business.
Previous report
Our oil remediation equipment utilizes specific technology to extract oil from sand. Oil producers are continually investigating alternative oil production technologies with a view to reduce production costs. In addition, industries that compete with the oil industry, such as the electric power industry, also continue to innovate and create products that compete with the oil industry. There can be no assurance that superior alternative technologies will emerge, which could reduce the demand for and price of our product and services.
Previous report
The market for our products and services is highly competitive and is becoming more so, which could hinder our ability to successfully market our products and services. We may not have the resources, expertise or other competitive factors to compete successfully in the future. We expect to face additional competition from existing competitors and new market entrants in the future. Many of our competitors have greater name recognition and more established relationships in the industry than we do. As a result, these competitors may be able to:
Previous report
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. For example, during the course of this type of litigation, confidential information may be inadvertently disclosed in the form of documents or testimony in connection with discovery requests, depositions or trial testimony. This disclosure could have a material adverse effect on our business and our financial results.
Previous report
When operational, our RPCs depend on our ability to manufacture various pieces of equipment, many of which are quite large. Any disruption in our manufacturing ability will adversely affect our business and operations.
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Reworded paragraphs (27)
Previous wording
Our revenues are substantially dependent on ongoing oil and natural gas exploration, development and production activity on or around our facilities and in basins in which we have established trucking operations. If exploration and production companies do not maintain drilling, completion and production activities on or around those areas, the demand for the use of our transportation and facilities, as well as the marketing activities and revenue we obtain related to those businesses, could be reduced, which could have a material adverse effect on our results of operations, cash flows and financial position.
Current wording
Our revenues are substantially dependent on ongoing oil and natural gas exploration, development, and production activity on or around our facilities and in the basins where we have established trucking and terminaling operations. If exploration and production companies do not maintain drilling, completion, and production activities near our facilities, demand for our transportation and terminaling services, as well as our marketing activities, could decline, which could have a material adverse effect on our results of operations, cash flows, and financial position.
Previous wording
We are not an exploration and production company, and we have no control over the oil and natural gas development activity on or around our facilities and assets. The willingness and ability of exploration and production companies to continue development activities on and around our facilities and assets is dependent on a variety of factors that are outside of their and our control, including:
Current wording
We are not an exploration and production company and have no control over the pace or scope of development activity in the regions where our assets are located. The willingness and ability of producers to maintain drilling and production depend on numerous factors beyond our control, including:
Previous wording
Our prospective customers operate in the oil and gas industry. As a result, we will be subject to the success of the oil and gas industry, which is subject to substantial volatility based on numerous worldwide factors. A decline in the price of crude oil or natural gas will have a material adverse effect on our business, financial condition, results of operations and cash flows. The oil and gas industry is competitive in all its phases. Competition in the oil and gas industry is intense. Our customers could include competitors such as oil and gas companies that have substantially greater financial resources, staff and facilities than those of our customers and lessees. Competitive factors in the distribution and marketing of oil and other hydrocarbon products include price and methods and reliability of delivery.
Current wording
Our customers and prospective customers operate in the oil and gas industry. As a result, we will be subject to the success of the oil and gas industry, which is subject to substantial volatility based on numerous worldwide factors. A decline in the price of crude oil or natural gas will have a material adverse effect on our business, financial condition, results of operations and cash flows. The oil and gas industry is competitive in all its phases. Competition in the oil and gas industry is intense. Our customers could include competitors such as oil and gas companies that have substantially greater financial resources, staff and facilities than those of our customers and lessees. Competitive factors in the distribution and marketing of oil and other hydrocarbon products include price and methods and reliability of delivery.
Previous wording
The global economy is subject to fluctuation and it is unclear how stable the oil industry and the manufacturing industry will be in the future. As a result, there can be no assurance that the business will achieve anticipated cash flow levels. Further, recent world events evolving out of trade disputes, increased terrorist activities and political and military action, and the COVID-19 pandemic, among other events, have created an air of uncertainty concerning the stability of the global economy. Historically, such events have resulted in disturbances in financial markets, and it is impossible to determine the likelihood of future events. Any negative change in the general economic conditions in the United States and globally could adversely affect the financial condition and operating results of the business. We plan to expand our level of operations. Slower economic activity, concerns about inflation or deflation, decreased consumer confidence, reduced corporate profits and capital spending, adverse business conditions and liquidity concerns in the general economy and recent international conflicts and terrorist and military activity have resulted in a downturn in worldwide economic conditions, especially in the United States. Political and social turmoil related to international conflicts and terrorist acts may place further pressure on economic conditions in the United States and worldwide. These political, social and economic conditions make it extremely difficult for us to accurately forecast and plan future business activities. If such conditions continue or worsen, then our business, financial condition and results of operations could be materially and adversely affected.
Current wording
The global economy is subject to fluctuation, and it is unclear how stable the oil industry and the manufacturing industry will be in the future. As a result, there can be no assurance that the business will achieve anticipated cash flow levels. Further, recent world events evolving out of trade disputes, increased terrorist activities and political and military action in the Middle East and elsewhere, among other events, have created an air of uncertainty concerning the stability of the global economy. Historically, such events have resulted in disturbances in financial markets, and it is impossible to determine the likelihood of future events. Any negative change in the general economic conditions in the United States and globally could adversely affect the financial condition and operating results of the business. We plan to expand our level of operations. However, slower economic activity, concerns about inflation or deflation, decreased consumer confidence, reduced corporate profits and capital spending, adverse business conditions and liquidity concerns in the general economy and recent international conflicts and terrorist and military activity have resulted in a downturn in worldwide economic conditions, especially in the United States. Political and social turmoil related to international conflicts and terrorist acts may place further pressure on economic conditions in the United States and worldwide. These political, social and economic conditions make it extremely difficult for us to accurately forecast and plan future business activities. If such conditions continue or worsen, then our business, financial condition and results of operations could be materially and adversely affected.
Previous wording
Future growth may place strains on our resources, possibly negatively affecting our results of operations, cash flows and financial position. Our ability to grow will depend on a number of factors, including:
Current wording
Our future growth may place demands on our financial, operational, and human resources, which could negatively affect our results of operations, cash flows, and financial position. Our ability to grow will depend on a number of factors, including:
Previous wording
We depend on the continued services of our key personnel, including James Ballengee, our Chief Executive Officer, Tyler Nelson, our Chief Financial Officer, Russ Shelton, our Executive Vice President and Chief Operating Officer, and Pat Knapp, our Executive Vice President, General Counsel & Secretary. Our work with each of these key personnel are subject to changes and/or termination, and our inability to effectively retain the services of our key management personnel, could materially and adversely affect our operating results and future prospects.
Current wording
We depend on the continued services of our key personnel, including James Ballengee, our Chief Executive Officer, Kimberly Hawley, our Executive Vice President, Chief Financial Officer & Treasurer, Les Patterson, our Executive Vice President and Chief Operating Officer, and Pat Knapp, our Executive Vice President, General Counsel & Secretary. Our work with each of these key personnel are subject to changes and/or termination, and our inability to effectively retain the services of our key management personnel, could materially and adversely affect our operating results and future prospects.
Previous wording
Additionally, we have certain potential dilutive instruments, of which the conversion of these instruments could result in dilution to shareholders: Potential dilutive instruments as of December 31, 2024 include the following: convertible notes payable, which are convertible into approximately 1,044,477 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 2,038,673 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 477,809 shares of common stock. The Company also has warrants outstanding to purchase 399,040 shares of common stock as of December 31, 2024.
Current wording
Additionally, we have certain potential dilutive instruments, of which the conversion of these instruments could result in dilution to shareholders: Potential dilutive instruments as of December 31, 2025 include the following: convertible notes payable, which are convertible into approximately 9,153,859 shares of common stock, stock options and vesting or unissued stock awards granted to previous and current employees of 7,784 shares of common stock, stock options and vesting or unissued stock awards granted to board members or consultants of 3,944 shares of common stock. The Company also has warrants outstanding to purchase 400 shares of common stock as of December 31, 2025.
Previous wording
James Ballengee, one of our officers and directors, and Chairperson of the Board of Directors, beneficially owns approximately 43.63% of our outstanding Common Stock. As a result, Mr. Ballengee is able to significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. Because the interests of Mr. Ballengee may not always coincide with those of our other stockholders, such stockholder may influence or cause us to take actions with which our other stockholders disagree.
Current wording
James Ballengee, one of our officers and directors, and Chairperson of the Board of Directors, beneficially owns approximately 5.0% of our outstanding Common Stock. As a result, Mr. Ballengee is able to significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. Because the interests of Mr. Ballengee may not always coincide with those of our other stockholders, such stockholder may influence or cause us to take actions with which our other stockholders disagree.
Previous wording
We have identified material weaknesses in our internal controls related to the segregation of duties and financial reporting process within our internal controls. As of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that: (1) we did not have enough personnel in our accounting and financial reporting functions. Due to insufficient personnel in our accounting department, we were not able to achieve adequate segregation of duties, and as a result, we did not have adequate review controls surrounding: (i) our technical accounting matters in our financial reporting process, and (ii) the work of specialists involved in the estimation process. (2) Due to new relationships with a small banking institution and consultants in 2023, we were not able to achieve adequate controls surrounding the review and dual authorization of certain treasury transactions and fixed assets. (3) We did not always follow certain review and authorization procedures related to corporate governance and the release of information to the public. After failing to adhere to certain corporate governance administrative procedures, we did not achieve adequate review at the executive or independent Board of Director level over certain accounting and risk assessments or the timely reporting of material transactions. We also did not achieve adequate review of certain public reports and disclosures prior to the public disclosure of the information. We believe we may be able to substantially resolve our identified material weakness in our internal controls in the future as we continue to hire personnel to fulfill the duties related to the financial reporting process and growth in our business. There can be no assurances that weakness in our internal controls will not occur in the future.
Current wording
We have identified material weaknesses in our internal controls related to segregation of duties and the financial reporting process. As of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that:
Previous wording
Our business requires permits to operate. Our inability to obtain permits in a timely manner could result in substantial delays to our business. In addition, our customers may not receive permitting for our equipment’s specific use and we may be unable to adjust our equipment to meet our customer’s permitting needs. The issuance of permits is dependent on the applicable government agencies and is beyond our control and that of our customers. There can be no assurance that we and/or our customers will receive the permits necessary to operate, which could substantially and adversely affect our operations and financial condition.
Current wording
Our business requires a variety of permits to operate. If we are unable to obtain or maintain these permits in a timely manner, our operations could be delayed or disrupted. Additionally, our customers may not receive permits for the specific use of our equipment, and we may be unable to modify our equipment to meet their permitting requirements. Permit issuance depends on applicable government agencies and is beyond our control and that of our customers. There can be no assurance that we or our customers will obtain the necessary permits, which could have a substantial adverse effect on our operations and financial condition.
Previous wording
We are required to pay permit and approval fees to operate in certain business segments and locations. If we are not able to pay those fees it would adversely impact our business.
Current wording
Because we are required to pay permit and approval fees to operate in certain business segments and locations, failure to pay such fees could materially and adversely affect our business.
Previous wording
We are required to pay various types of permit and approval fees to the applicable governmental and quasi-governmental agencies to operate our business. These fees are subject to change at the discretion of the various agencies. Our inability to pay these permit and approval fees could substantially and adversely affect our operations and financial condition.
Current wording
We are required to pay various permit and approval fees to governmental and quasi-governmental agencies to operate in certain business segments and locations. These fees are subject to change at the discretion of the various agencies. Our inability to pay these permit and approval fees could substantially and adversely affect our operations and financial condition.
Previous wording
If we are able to begin operations with our RPCs and remediation services we could incur substantial losses from those operations.
Current wording
If we are unable to begin operations with our RPCs and remediation services, or if delays or other risks inherent in early-stage operations occur, we could incur substantial losses.
Previous wording
We will continue to be subject to competition in both of our business segments.
Current wording
We will continue to be subject to competition in our business segments.
Previous wording
We carry insurance coverage against liabilities for personal injury, death and property damage, but there is no guarantee this coverage will be sufficient to cover us against all claims.
Current wording
We carry insurance coverage against liabilities for personal injury, commercial liability, pollution, death and property damage, but there is no guarantee this coverage will be sufficient to cover us against all claims.
Previous wording
Although, we maintain insurance coverage against liability for personal injury, death and property damage, there can be no assurance that this insurance will be sufficient to cover any such liabilities. We may not be insured or fully insured against the losses or liabilities that could arise from a casualty in the business operations. In addition, there can be no assurance that particular risks that are currently insurable will continue to be insurable on an economical basis or that the current levels of coverage will continue to be available. If a loss occurs that is partially or completely uninsured, we may incur a significant liability.
Current wording
Although, we maintain insurance coverage against liability for personal injury, commercial liability, pollution, death and property damage, however there can be no assurance that this coverage will be sufficient to fully cover such liabilities. We do not carry business interruption insurance and we may not be insured or fully insured against the potential losses that could arise from our operations. In addition, there can be no assurance that insurance for certain risks will remain available in the future on commercially reasonable terms, from our current carriers, or at existing coverage levels. If a loss occurs that is partially covered or completely uninsured, or if coverage becomes unavailable for any reason, we could be subject to significant liability, which may adversely affect our business.
Previous wording
Our ability to compete partly depends on the superiority, uniqueness and value of our intellectual property. To protect our proprietary rights, we will rely on a combination of patents, copyrights and trade secrets, confidentiality agreements with our employees and third parties, and protective contractual provisions. Despite these efforts, any of the following occurrences may reduce the value of our intellectual property:
Current wording
Our ability to compete partly depends on the superiority, uniqueness and value of our intellectual property. To protect our proprietary rights, we rely on a combination of patents, copyrights, trade secrets, confidentiality agreements with employees and third parties, and protective contractual provisions. Despite these efforts, our applications for patents may not be granted or, if granted, may be challenged or invalidated. Issued patents may not provide us with competitive advantages, and our protection efforts may not prevent misappropriation of our technology or the development of competing technologies. In addition, another party may obtain a blocking patent, which could force us to obtain a license or design around the patent in order to continue offering certain features or services.
Previous wording
In order to protect or enforce our patent rights, we may initiate patent litigation against third parties. In addition, we may become subject to interference or opposition proceedings conducted in patent and trademark offices to determine the priority and patentability of inventions. The defense of intellectual property rights, including patent rights through lawsuits, interference or opposition proceedings, and other legal and administrative proceedings, would be costly and divert our technical and management personnel from their normal responsibilities. An adverse determination of any litigation or defense proceedings could put our pending patent applications at risk of not being issued.
Current wording
In order to protect or enforce our intellectual property rights, we may initiate litigation or become subject to interference or opposition proceedings in patent and trademark offices. These matters are often expensive and time-consuming, and could divert our technical and management personnel from their normal responsibilities. An adverse determination could put our pending patent applications at risk of not being issued or limit our ability to protect existing rights. In addition, the discovery process in such proceedings creates a risk that some of our confidential information could be disclosed through documents, depositions, or testimony, which could materially and adversely affect our business and financial results.
Previous wording
Our operations rely on our ability to transport our equipment to different locations. Any impact on the cost, availability and reliability of transportation could adversely affect our business.
Current wording
Because our operations depend on our ability to transport equipment to various locations, any increase in cost or disruption in the availability or reliability of transportation could adversely affect our business.
Previous wording
The lands on which we conduct our business operations must comply with applicable zoning regulations. Any unknown or future violations could limit or require us to cease operations.
Current wording
The lands on which we conduct our business operations must comply with applicable zoning and land use regulations. Any existing and future violations, changes in zoning laws, or challenges by local authorities could limit our ability to operate, require costly modifications, or force us to relocate facilities. Such restrictions could adversely affect our business, financial condition, and cash flows.
Previous wording
We may be subject to liability if our equipment does not perform as expected.
Current wording
We may be subject to liability if our equipment, facilities, and assets do not perform as expected.
Previous wording
We may be exposed to liability in the event our equipment does not perform as expected. We intend to enter into contracts with customers, which will grant certain rights with respect to the condition and use of our products. Certain contractual and legal claims could arise in the event the equipment does not perform as expected and in the event of personal injury, death or property damage as a result of the use of our equipment. There can be no assurance that particular risks are insured or, if insured, will continue to be insurable on an economical basis or that current levels of coverage will continue to be available. We may be liable for any defects in the equipment or its products and services and uninsured or underinsured personal injury, death or property damage claims.
Current wording
We may be exposed to liability if our equipment, facilities, or other assets fail to perform as intended. Contracts with customers typically grant rights regarding the condition and use of our products and services, and certain contractual or legal claims could arise in the event of equipment failure, defects, or accidents. Such claims could involve personal injury, death, property damage, or pollution. While we maintain insurance coverage, there can be no assurance that all risks are insured, that insurance will remain available on economically reasonable terms, or that our coverage limits will be sufficient. We may be liable for uninsured or underinsured claims, which could materially and adversely affect our business, financial condition, and results of operations.
Previous wording
We outsource certain aspects of our business to third party contractors. We are subject to the risks associated with such contractors’ ability to successfully provide the necessary services to meet the needs of our business. If the contractors are unable to adequately provide the contracted services, and we are unable to find alternative service providers in a timely manner, our ability to operate the business may be disrupted, which may adversely affect our business, financial condition, results of operations and cash flows.
Current wording
We outsource certain aspects of our business to third-party contractors and rely on their ability to provide services in a timely and effective manner. If contractors fail to perform or if we are unable to secure qualified replacements, our operations could be disrupted, which may materially affect our business, financial condition, results of operations, and cash flows.
Previous wording
We may not be able to identify, negotiate, finance or close future acquisitions.
Current wording
Our growth strategy includes acquiring additional companies, crude oil marketing strategies, and transportation or facility assets, but we may not be able to identify, negotiate, finance, or close acquisitions on acceptable terms, if at all. Even if acquisitions are completed, we may face challenges managing multiple businesses or integrating new operations, including differences in corporate culture, systems, personnel, or competitive environments. Acquisitions may also involve companies with limited operating histories, small market shares, reliance on key personnel, unpredictable operating results, litigation exposure, rapidly changing products, or significant capital requirements. Competition from other investors may further increase acquisition costs or limit available opportunities. Future acquisitions may fail to perform as expected, and any of these risks could materially and adversely affect our business, results of operations, financial condition, and the trading price of our common stock.
Previous wording
Our common stock is listed on Nasdaq; however, to keep our listing on Nasdaq, we are required to maintain: (i) a minimum bid price of $1.00 per share, (ii) a certain public float, (iii) a certain number of round lot shareholders and (iv) one of the following: a net income from continuing operations (in the latest fiscal year or two of the three last fiscal years) of at least $500,000, a market value of listed securities of at least $35 million or a stockholders’ equity of at least $2.5 million.
Current wording
Our common stock is listed on Nasdaq; however, to keep our listing on Nasdaq, we are required to maintain: (i) a minimum bid price of $1.00 per share, (ii) a certain public float, (iii) a certain number of round lot shareholders and (iv) one of the following: a net income from continuing operations (in the latest fiscal year or two of the three last fiscal years) of at least $500,000, a market value of listed securities of at least $35 million or a stockholders’ equity of at least $2.5 million. Previously, we were not in compliance with Nasdaq’s $1.00 per share minimum bid price requirement, which caused us to be suspended from trading on Nasdaq. We recently regained compliance with Nasdaq’s $1.00 minimum bid price requirement and expect to be re-listed on Nasdaq in April, 2026.
Previous wording
We are not in the business of buying and selling securities of other companies. As our strategy had involved the Company investing in other companies, including Scepter Holdings, it is possible that we could be deemed an investment company, although, given the nature and extent of our business operations, we do not believe that we are or will be subject us to the Investment Company Act. Our investment in Scepter Holdings arose from loan agreements that were settled in the form of equity because cash was not available for the borrowers to pay the loans in cash. The Company has not traded or sold any securities of other companies that it has acquired. For those LLCs for which the Company serves as manager, it has been disclosed in the business plan of these LLCs that their primary business is related to our administration, or our operations, or our proposed future operations. These entities do not engage in activities such as investing, reinvesting, owning, holding or trading “investment securities,” and neither the units of ownership for these entities, nor rights to royalties, have any market and are not traded, and such interests are accounted for at cost.
Current wording
We are not in the business of buying and selling securities of other companies. As our strategy had involved the Company investing in other companies, including Adapti, Inc., it is possible that we could be deemed an investment company, although, given the nature and extent of our business operations, we do not believe that we are or will be subject us to the Investment Company Act. Our investment in Adapti, Inc. arose from loan agreements that were settled in the form of equity because cash was not available for the borrowers to pay the loans in cash. The Company has not traded or sold any securities of other companies that it has acquired. For those LLCs for which the Company serves as manager, it has been disclosed in the business plan of these LLCs that their primary business is related to our administration, or our operations, or our proposed future operations. These entities do not engage in activities such as investing, reinvesting, owning, holding or trading “investment securities,” and neither the units of ownership for these entities, nor rights to royalties, have any market and are not traded, and such interests are accounted for at cost.
Previous wording
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Presently, our “investment securities,” which include our holdings in Scepter Holdings, as well as certain entities described in our corporate structure, comprise approximately 7% of our total assets, which is below such 40% threshold. As our business continues to develop and production increases, the percentage of our total assets comprised of investment securities is expected to decline substantially; however, in the event that the percentage of our holdings in investment securities increases, we risk exceeding such 40% threshold and being deemed an investment company. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
Current wording
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Presently, our “investment securities,” which include our holdings in Adapti, Inc., as well as certain entities described in our corporate structure, comprise approximately .22% of our total assets, which is below such 40% threshold. As our business continues to develop and production increases, the percentage of our total assets comprised of investment securities is expected to decline substantially; however, in the event that the percentage of our holdings in investment securities increases, we risk exceeding such 40% threshold and being deemed an investment company. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our business is substantially dependent on oil and natural gas exploration, development, and production activity.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Future acquisitions may fail to perform as expected.