Financial Performance - For the three months ended September 30, 2024, the company reported revenues of 15,916,423,adecreaseof396,983 or 2.43% compared to 16,313,406inthesameperiodof2023[189].−FortheninemonthsendedSeptember30,2024,revenuesincreasedto48,118,936, representing a growth of 2,670,020or5.8745,448,916 in 2023 [189]. - The company's cost of revenues for the three months ended September 30, 2024, was 14,190,073,adecreaseof576,421 or 3.90% from 14,766,494in2023[191].−OperatingexpensesforthethreemonthsendedSeptember30,2024,increasedto3,684,987, an increase of 1,392,961or60.772,292,026 in 2023 [193]. - Interest expense for the three months ended September 30, 2024, decreased to 641,244,areductionof703,852 or 52.33% from 1,345,096in2023[195].−Thecompanyreportedanunrealizedgainof826,377 for the three months ended September 30, 2024, compared to an unrealized loss of 661,101inthesameperiodof2023,representinganincreaseof1,487,478 or 225% [196]. - As of September 30, 2024, the company had an accumulated deficit of approximately 72.8millionandaworkingcapitaldeficitofapproximately42.5 million [199]. Financing Activities - The company recognized a gain on deconsolidation of 438,099fortheyearendedDecember31,2023,andagainof177,550 for the six months ended September 30, 2024, due to the deconsolidation of Viva Wealth Fund I, LLC and Vivasphere, Inc. [117]. - The company entered into a financing agreement with Maxus Capital Group, LLC, for approximately 2.1millionforequipmentrelatedtoapipelineextension,withexpectedleasepaymentsofabout32,161 per month over four years [122]. - A separate financing agreement with Maxus for approximately 1millionforwashplantequipmentinHouston,withexpectedleasepaymentsofabout58,595 per month over four years, is also in place [124]. - The company anticipates a lease for another 2.2millionfinancingagreementwithMaxustocommenceinthefirstquarterof2025,withexpectedpaymentsofapproximately57,962 per month over four years [125]. - A promissory note was issued to Ballengee Holdings, LLC, for up to 1,500,000,withaprincipalandaccruedinterestbalanceof804,150 and 21,274asofSeptember30,2024[126].−Asecuredpromissorynoteof3,000,000 was issued on February 5, 2024, with 250,000ofprincipalrepaidbySeptember30,2024[143].−TheCompanyhasanewloanagreementwithaprincipalamountof3,670,160.77, maturing on October 31, 2025, with a 22% annual interest rate [146]. - The Company plans to prepay the entire outstanding balance of the term loan if it raises 10,000,000ormorefromequitysales[148].−TheCompanyissuedaconvertiblepromissorynotefor500,000 with a conversion price set at 90% of the average closing price of common stock [152]. - The company raised approximately 4.7millionthroughdebtfinancingsand1.4 million through the sale of common stock during the nine months ended September 30, 2024 [200]. Mergers and Acquisitions - The company is in the process of acquiring several entities through a merger agreement with Empire Energy Acquisition Corp. and a membership interest purchase agreement with Endeavor Crude, LLC [130]. - The Company entered into a merger agreement with Empire Energy Acquisition Corp., resulting in the issuance of 67,200,000 shares valued at 67,200,000[156].−TheCompanycompletedtheacquisitionofEndeavorCrude,LLCandrelatedentitiesforapurchasepriceof120 million, making them wholly-owned subsidiaries [183]. - The Endeavor Entities operate a fleet of over 500 commercial tractors and trailers, hauling approximately 60,000 barrels of crude oil and 30,000 barrels of produced water daily [184]. - The Merger Agreement requires approval from the necessary stockholders of both the Parent and Empire before the Closing Date [164]. - The Parent must obtain a Fairness Opinion confirming the Merger's financial fairness to its stockholders [164]. - Empire must maintain a Net Cash Minimum on hand as a condition for the Merger [167]. - A lock-up agreement will be established for Empire Stockholders representing at least 65% of the outstanding shares, lasting 12 months post-Closing [176]. - An Escrow Agreement will be executed, involving 5,040,000 Consideration Shares as security for the Parent's obligations [178]. - The Parent's liability for indemnification payments is capped at 500,000,withathresholdof250,000 for claims [168]. - The Merger Agreement allows for termination under specific conditions, including failure to obtain necessary stockholder votes [172]. - The Parent Common Stock must remain listed on Nasdaq and not be suspended at the Closing Date [167]. - The Parent and Empire must deliver voting and support agreements from stockholders holding at least 51% of voting power within 30 days of the Execution Date [173][174]. Employment and Compensation - The new employment agreement for the Chief Financial Officer includes an annual base salary of 450,000 and potential bonuses based on performance and transactions [133]. - The new Executive Vice President, General Counsel, & Secretary, Patrick M. Knapp, has an annual base salary of 350,000 and potential annual incentive compensation of up to 840,000[138].−Mr.Nelsonwasgranted917,825stockoptionsatanexercisepriceof1.80, with full vesting by June 9, 2024 [135]. - The Vice President of Marketing's base salary is 200,000,whichmayincreaseto350,000 contingent upon achieving net profitability of 500,000[140].−TheBoardofDirectorswillconsistofsevenmembers,includingJamesBallengeeasChairman,withatleastfourindependentdirectors[162].−ThecompanyhasappointedMr.MichaelThompsonasanindependentdirectorandchairoftheAuditCommittee[128].OperationalHighlights−Thecompanyisfocusedonsoilremediationservices,particularlyinKuwaitandHouston,Texas,utilizingpatentedprocessestorecoverhydrocarbons[120].−Stock−basedcompensationfortheninemonthsendedSeptember30,2024,was1,626,409, up from 1,260,476in2023,markinganincreaseofabout291,015,402 for the nine months ended September 30, 2024, compared to 735,919in2023,reflectinganincreaseofapproximately37.91.5 million for the Texas remediation and wash plant facilities [205]. - Contractual obligations for finance lease liabilities as of September 30, 2024, total 1,307,523,withsignificantpaymentsduein2025and2026[207].−ThecompanyexpectsleasepaymentstoMaxustobeapproximately32,161 per month over four years for a new pipeline extension [207]. Risks and Challenges - Interest rate risk exists due to variable interest rates on financing arrangements, which could increase interest expenses if the prime rate rises [213]. - Inflationary pressures may lead to increased costs of doing business, potentially affecting gross margins and return on investment [216].
