Vivakor (US:VIVK)2025-11-19 21:54Financial Instruments and Debt - The Company reported a principal amount of $6,625,000 for a junior secured convertible promissory note issued to J.J. Astor & Co., receiving $5,000,000 net of fees[141]. - The Lender converted $4.05 million of outstanding principal into approximately 34.5 million shares of the Company's common stock at discounted prices[142]. - The Outstanding Principal Amount of the Initial Note was $2,259,319.89, and the Outstanding Principal Balance on the Second Note was $5,685,805.13 as of the Forbearance Agreement Effective Date[145]. - The Company agreed to a default interest rate of 19% on the Initial Note and Second Note, with all amounts due by November 30, 2025[145]. - The Company received $1,152,000 from the Third Note after legal and origination fees, with a principal amount of $1,620,000[146]. - The Company issued a convertible promissory note for a principal amount of $647,500, receiving $550,000 in exchange and issuing 82,500 shares of common stock as an incentive[147]. - On October 16, 2025, the Company raised approximately $5 million through a registered direct offering of 8,417,645 shares at $0.2164 per share and 14,689,851 pre-funded warrants at $0.2154[148]. - A second offering on October 30, 2025, raised approximately $2.55 million by issuing 10,600,000 shares at $0.18 per share and 3,566,666 pre-funded warrants at $0.179[156]. - The Company entered into a Physical Commodity Intermediation Agreement with a wholesaler, providing up to $40 million in credit support for commodity trading activities[154]. Business Operations and Acquisitions - The Company acquired Endeavor Crude, LLC and other entities on October 1, 2024, enhancing its operations in the midstream oil and gas industry[139]. - The Company is focused on building an integrated midstream and environmental services platform to enhance operational efficiency and market access[138]. - The Company is developing Remediation Processing Centers, with the first facility under construction in Texas, expected to process oilfield solid wastes into valuable byproducts[137]. - The Company has revised its segment structure to report three operating segments: transportation and logistics, terminaling and storage services, and supply and trading[133]. - The Company revised its segment reporting structure to include three operating segments: transportation and logistics, terminaling and storage services, and supply and trading, reflecting the expansion of its business activities[166]. Financial Performance - For the three months ended September 30, 2025, the Company reported revenues of $16,981,385, an increase of $1,064,962 or 6.7% compared to $15,916,423 in the same period of 2024[170]. - The cost of revenues decreased to $12,261,886 for the three months ended September 30, 2025, down $1,928,187 or 13.59% from $14,190,073 in 2024[172]. - Gross profit for the three months ended September 30, 2025, was $4,719,499, representing an increase of $2,993,149 or 173% compared to $1,726,350 in 2024[173]. - Operating expenses increased to $13,750,500 for the three months ended September 30, 2025, an increase of $10,065,513 or 273% from $3,684,987 in 2024, primarily due to costs from the acquired Endeavor Entities[174]. - Total interest expense for the three months ended September 30, 2025, was $14,439,961, an increase of $13,798,717 or 2,152% compared to $641,244 in 2024, driven by refinancing and forbearance arrangements[175]. - For the nine months ended September 30, 2025, total revenues increased by 221.79% to $83.4 million, attributed to higher activity in transportation and logistics and terminaling and storage services from the Endeavor Entities acquisition[184]. - The cost of revenues for the nine months ended September 30, 2025, was $69.4 million, representing an increase of 177.24% compared to the prior year, driven by the operations of the newly acquired Endeavor Entities[186]. - Gross profit for the nine months ended September 30, 2025, was $14.1 million, an increase of 588.08% from $3.9 million in 2024, reflecting the growth in revenue and cost of revenue activities[187]. - Operating expenses for the nine months ended September 30, 2025, rose to $36.3 million, a 704.87% increase, primarily due to costs from the Endeavor Entities and a $5.0 million legal reserve[188]. - Interest expense for the nine months ended September 30, 2025, totaled $20.0 million, a significant increase of 2,876.07% compared to the prior year, driven by refinancing and forbearance arrangements[189]. - A loss on conversion of debt of $9.8 million was recognized during the nine months ended September 30, 2025, compared to $0 in the prior year, due to the conversion of convertible debt into common stock[190]. - Unrealized losses on marketable securities for the nine months ended September 30, 2025, amounted to $249,080, a decrease of 120.14% from an unrealized gain of $743,739 in 2024[191]. - For the nine months ended September 30, 2025, the company reported net cash provided by operating activities of $4,311,676, a significant increase from $165,359 in the same period of 2024[199]. - The company experienced a net loss of $54,358,617 for the nine months ended September 30, 2025, compared to a net loss of $6,983,978 in 2024[202]. Cash Flow and Financial Position - As of September 30, 2025, the company had an accumulated deficit of approximately $148.1 million and a working capital deficit of approximately $62.3 million[200]. - Cash and cash equivalents decreased from $3,676,992 as of December 31, 2024, to $1,191,766 as of September 30, 2025, with $892,124 classified as restricted cash[201]. - Net cash used in financing activities totaled $8,494,343 for the nine months ended September 30, 2025, reflecting substantial payments on notes payable and finance lease obligations[204]. - The company anticipates approximately $1.5 million of additional expenditures related to the continued development of its Texas remediation and wash plant facilities[205]. - The company had no capitalized interest during the nine months ended September 30, 2025, compared to $1.0 million in the same period in 2024[205]. - As of September 30, 2025, the company had finance lease obligations totaling $8,929,265[207]. Going Concern and Risks - The company faces substantial doubt about its ability to continue as a going concern due to historical net losses and negative cash flows from operations[200]. - The company is exposed to interest rate risk due to financing arrangements with variable interest rates based on the prime rate[209].