Vivakor, Inc. (Form: S-1/A, Received: 02/12/2021 18:36:27)

Table of Contents

As filed with the U.S. Securities and Exchange Commission on February 12, 2021

Registration No. 333-250011

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

Amendment No. 2

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

_________________

VIVAKOR, INC.

(Exact name of registrant as specified in charter)

Nevada		8731		26-2178141
(State or other jurisdiction of incorporation)		(Primary Standard Classification Code Number)		(IRS Employer I.D. Number)

Vivakor, Inc.

433 Lawndale Drive
South Salt Lake City, UT 84115

(949) 281-2606
(Address and telephone number of principal executive offices)

_________________

(Address of principal place of business or intended principal place of business)

_________________

Matthew Nicosia
Chief Executive Officer

Vivakor, Inc.
433 Lawndale Drive
South Salt Lake City, UT 84115

(949) 281-2606

(Name, address, including zip code, and telephone number including area code, of agent for service)

_________________

With copies to:

Joseph M. Lucosky, Esq.

Scott E. Linsky, Esq.
Lucosky Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, NJ 08830
Tel. No.: (732) 395-4400
Fax No.: (732) 395-4401

_________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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

Large-Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☒

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾⁽²⁾		Amount of Registration Fee ⁽⁶⁾
Common Stock, par value $0.001⁽³⁾	$	13,800,000	$	1,505.58
Representative’s Warrants ⁽⁴⁾		–		–
Shares of Common Stock underlying Representative’s Warrants ⁽⁵⁾	$	750,000	$	81.83
Total	$	14,550,000	$	1,587.41

____________

(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”).

(2)	Includes initial public offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any.

(3)	Pursuant to Rule 416 of the Securities Act, the shares of common stock registered hereby also includes an indeterminable number of additional shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions.

(4)	No fee required pursuant to Rule 457(g) under the Securities Act.

(5)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. The Representative’s Warrants are exercisable for a number of shares equal to 5% of the shares of common stock offered hereby at a per share exercise price equal to 125% of the public offering price per share. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the Representative’s Warrants is $750,000, which is equal to 125% of $600,000 (5% of $12,000,000).

(6)	Previously paid.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION

DATED FEBRUARY 12, 2021

Shares

Common Stock

Vivakor, Inc.

This is a firm commitment public offering of shares of common stock of Vivakor, Inc.

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “VIVK”. If our listing application is not approved, we will not proceed with the offering. Our common stock is currently quoted on the OTCPink Marketplace operated by OTC Markets Group Inc. (the “OTCPink”) under the trading symbol “VIVK”. On January 28, 2021, the last reported sale price for our common stock on the OTCPink was $0.394.

We expect to effect a -for- reverse stock split of our outstanding common stock prior to the completion of this offering (the “Reverse Stock Split”). The share and per share information in this prospectus reflects, other than in our Financial Statements and the Notes thereto, the Reverse Stock Split.

The bona fide estimate of the range of the maximum offering price is from to and the maximum number of securities offered is (after giving effect to the reverse stock split). The actual public offering price per share will be determined through negotiations between us and the underwriter at the time of pricing and may be at a discount to the current market price. Therefore, the estimated public offering price used throughout this prospectus may not be indicative of the final offering price.

We are an “emerging growth company” under the federal securities laws and have elected to comply with certain reduced public company reporting requirements.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 10. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions⁽¹⁾	$	$
Proceeds to us, before expenses	$	$

(1)	Underwriting discounts and commissions do not include a non-accountable expense allowance up to $75,000 payable to the underwriters. We refer you to “Underwriting” beginning on page 63 for additional information regarding underwriters’ compensation.

We have granted a 45-day option to the representative of the underwriters to purchase up to additional shares of common stock solely to cover over-allotments, if any.

The underwriters expect to deliver the shares to purchasers on or about , 2021.

The date of this prospectus is , 2021

TABLE OF CONTENTS

		Page
PROSPECTUS SUMMARY		1
RISK FACTORS		10
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		22
USE OF PROCEEDS		23
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS		24
CAPITALIZATION		25
DILUTION		27
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS		29
BUSINESS		39
MANAGEMENT		49
EXECUTIVE COMPENSATION		54
PRINCIPAL SHAREHOLDERS		57
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		59
DESCRIPTION OF SECURITIES		60
TRANSFER AGENT AND REGISTRAR		62
UNDERWRITING		63
LEGAL MATTERS		68
EXPERTS		68
WHERE YOU CAN FIND MORE INFORMATION		68
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

You should rely only on information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus. Neither the delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus or any free writing prospectus is correct after the date of this prospectus or such free writing prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted.

No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.

Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

We also use certain trademarks, trade names, and logos that have not been registered. We claim common law rights to these unregistered trademarks, trade names and logos.

PROSPECTUS SUMMARY

This summary highlights selected information appearing elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information you should consider before investing in our securities. You should read this prospectus carefully, especially the risks and other information set forth under the heading “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus before making an investment decision. Our fiscal year end is December 31 and our fiscal years ended December 31, 2019 and December 31, 2018 are sometimes referred to herein as fiscal years 2019 and 2018, respectively. Some of the statements made in this prospectus discuss future events and developments, including our future strategy and our ability to generate revenue, income and cash flow. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements”. Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company,” or “our Company,” and “Vivakor” refer to Vivakor, Inc., a Nevada corporation, and its wholly owned subsidiaries.

Overview

Vivakor, Inc. is a socially responsible operator, acquirer and developer of clean energy technologies and environmental solutions, primarily focused on soil remediation. We 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 process allows us to successfully recover hydrocarbons from the soil, which we believe could then be used to produce asphaltic cement and/or other petroleum-based products. In 2015, we acquired and improved technology aimed at remediating contaminated soil and recovering usable hydrocarbons, which we refer to as Remediation Processing Centers (“RPCs”). We presently have three patent applications pending related to our RPCs and two issued patents related to our other remediation technologies. Our RPCs each have the potential to clean a minimum of 20 tons of contaminated material per hour, depending on the oil contamination percentage in the processed material. Each RPC has the capacity to extract on a 24-hour operation 500 tons or more of contaminated material per day. The amount of extracted hydrocarbon recovered depends on the extent to which the material is contaminated. For example, we estimate that for every 480 tons of contaminated material recovered per day that contains at least 10% oil, we will recover approximately 250 barrels of extracted hydrocarbons, calculated as follows: contaminated material that is 10% oil is comprised of 200 pounds of oil per ton; one gallon of oil weighs 8.44 pounds, resulting in 23.69 gallons of oil per ton of contaminated material (200/8.44); there are 42 gallons per barrel, resulting in 0.56 barrels of oil per ton of contaminated material (23.69/42); 20 tons of contaminated material can typically be processed per hour, resulting in 11.2 barrels of oil per hour (0.56*20); and operations continue 24 hours per day, resulting in 268.8 barrels per day (11.2*24).

We have designed our RPCs to provide an environmentally friendly solution to the remediation of hydrocarbon-contaminated soil, as they do not utilize water. Our RPCs operate by loading contaminated soil onto a feeder and conveyor system that effectively delivers the material into a fully contained, closed-loop system. Physical separation of the hydrocarbons from the contaminated soil does not utilize water or steam and is instead accomplished using a proprietary extraction fluid to dissolve the hydrocarbon components.

The entire extraction process is completed in a series of sealed chambers. The reclaimed extraction fluid is then recycled back into the process, which ensures that no toxic chemicals are released into the soil or the environment. Upon completion of our remediation and separation process, the extracted hydrocarbons are placed into holding tanks to be picked up by our customers, while clean soil is returned to the environment.

We believe our RPCs are significantly more advanced than other oil remediation technologies or offerings presently available on the market. Our RPCs have successfully cleaned contaminated soil containing greater than 7% hydrocarbon content, while, to our knowledge, our competitors are limited to projects containing less than 5% hydrocarbon contamination. We believe our ability to clean soil with more highly concentrated hydrocarbon contamination gives us a distinct advantage that will allow us to operate on a global basis in any location that has suffered from oil spills or naturally occurring oil sands deposits. While our primary focus and mandate will be on the manufacture and deployment of our RPCs, we intend to continue to develop, acquire or license additional clean energy technologies and environmental solutions that will directly enhance and expand our current technologies and service offerings.

Our current focus is on the clean-up of greater than 7% hydrocarbon contaminated soil located in Kuwait as a result of the Iraqi invasion in 1991 and naturally occurring oil sands deposits in Utah. We have deployed two RPC units to date, including one unit to Kuwait (for which operations have been temporarily suspended due to COVID-19) and another to Vernal, Utah (which is presently operating). We expect to deploy two additional RPCs to Vernal, Utah with the proceeds from this offering and believe that there may be an opportunity to deploy additional RPCs in Utah, as well as to Kuwait and the Middle East.

In April 2020, we entered into a project charter agreement with solvAQUA Inc. (“solvAQUA”), a Canadian-based clean water technology company, pursuant to which we may purchase certain wastewater removal equipment from solvAQUA. The solvAQUA Wastewater Management System (“WMS”) is a compact solution that continually processes and separates large volumes of wastewater (4,000+ m3/day for each WMS) with an ability to scale to remove any volume of oil, grease and suspended solids from wastewater, in most cases removing 99.99% of waste. The processed water stream can in some cases be discharged or reused without further treatment. We have placed our first order with solvAQUA for WMS equipment and anticipate receipt and installation of the equipment prior to December 31, 2020, with operations to commence shortly thereafter. On July 15, 2020, solvAQUA granted us an exclusive license to either incorporate solvAQUA’s technology platform into our RPCs or to use it independently. This will allow us to service remediation projects that have a combination of wet and dry opportunities. The exclusive license has an initial term of one year, which may be extended to five years upon our successful installation and deployment of the first two WMSs.

Our proprietary metallic separation technology uses a thermal vapor process to extract and process micro particles of precious metals and rare earth minerals, including gold, silver, platinum, palladium and rhodium from soils. After we complete our soil remediation services, we evaluate the post-remediated soil and, if we find that the soil contains more than 1% concentration of these metals, we process it through this technology to extract and concentrate these micro particles of precious metals and rare earth minerals into a concentrated, unrefined flake form.

We have also acquired and/or licensed two separate technologies described below that will enable us to upgrade the hydrocarbons recovered from our remediation process. These processes have been proven in laboratory tests, but we have not yet performed this upgrading in a commercial setting.

We have been granted a worldwide, exclusive, non-transferable license to the intellectual property embodied in cavitation technology developed by B Green, Inc. (“B Green”) to develop, manufacture, have manufactured, use market, import, have imported, offer for sale and sell cavitation devices built from the licensed intellectual property. Third party, independent testing conducted by the University of Utah has shown that this proprietary technology increases the API gravity of hydrocarbons by elongating the hydrocarbon chains without cutting or cracking these chains. API gravity is the measure of how heavy or light petroleum liquid is compared to water and is used in the industry as the standard measure for viscosity. The API of the recovered crude is increased, allowing such crude to have additional uses and usually at higher unit prices.

We have also been granted an exclusive right to use the nano-sponge technology developed by CSS Nanotech, which essentially serves as a micro-upgrader, transforming hydrocarbon product into a more useful product, such as petroleum or gasoline, as an addition to our hydrocarbon extraction technology. The inventor of this technology subsequently joined us as our Chief Scientific Officer. This patented technology allows for hydrocarbon material to be absorbed by a specialized sponge. Low energy microwaves are then introduced into the process and the sponge, which is made of a highly thermally conductive material, absorbs this energy causing an instant thermal effect, which essentially refines the crude by cutting or cracking the carbon chains. We intend to add this system to our process of upgrading the heavy crude recovered by our RPCs.

Corporate Structure

Revenue

Our RPC situated in Vernal, Utah has the capacity to process 480 tons or more of naturally occurring oil sands deposits per day. We estimate that if the extracted material is composed of at least 10% oil, we will recover approximately 250 barrels of extracted hydrocarbons each day, which could then be sold for energy or converted to asphaltic cement and sold for use in roads at higher prices. The above example has been calculated as follows: contaminated material that is 10% oil is comprised of 200 pounds of oil per ton; one gallon of oil weighs 8.44 pounds, resulting in 23.69 gallons of oil per ton of contaminated material (200/8.44); there are 42 gallons per barrel, resulting in 0.56 barrels of oil per ton of contaminated material (23.69/42); 20 tons of contaminated material can typically be processed per hour, resulting in 11.2 barrels of oil per hour (0.56*20); and operations continue 24 hours per day, resulting in 268.8 barrels per day (11.2*24).

In Kuwait, where we do not have ownership of the recovered oil, we generate revenues by charging per cubic meter of soil remediated. For our current project we will generate revenues of $72 per cubic meter of contaminated material processed.

We market and sell the precious metals we extract from our remediated and waste soils. As we continue our efforts, we anticipate increased opportunities to monetize our precious metals end product. Additionally, we had recently engaged in open market precious metals transactions, utilizing our knowledge and contacts related to this industry, during a time when we could not operate in Kuwait due to COVID-19 restrictions. Although engaging in such open market precious metals transactions is not part of our current plans for business operation, we expect to have the ability to revisit this business in the future should extenuating circumstances occur that adversely impact our remediation business.

Market Opportunity

We believe that the market for remediating oil from both soil and water is significant. According to Grandview Research, the market for environmental clean-up of oil spills will reach $177 billion by 2025. We believe that a large portion of that market will originate from contamination of more than 7% hydrocarbon content and that our technology is currently the only one that can economically remediate these environmental disasters, while allowing for the capture and reuse of the crude.

In addition, we believe that the heavy crude that we have been recovering in Utah is ideal for producing asphaltic cement. The demand for asphaltic cement in the United States is presently estimated to be $116 billion this year according to Global Market Insights. We have provided our material to asphalt companies for testing to determine what modifications, if any, would be needed to be meet their specifications. Provided we are able to produce asphaltic cement that meets our customers’ specifications, we believe that we will be able to offer our product at very competitive prices and in an environmentally friendly manner.

Competitive Strengths and Growth Strategy

We are focused on the remediation of contaminated soil and water resulting from either man-made spills or naturally occurring deposits of oil. Our primary focus has been the remediation of oil spills resulting from the Iraqi invasion of Kuwait in 1991 and naturally occurring oil sands deposits in the Uinta basin located in Eastern Utah. We plan to expand into other markets, both in Utah and globally, where we believe our technology and services will provide a distinct competitive advantage over our competition.

Competitive Strengths

We believe the following strengths provide us with a distinct competitive advantage and will enable us to effectively compete on a global basis:

Proprietary patent-pending technology;

Strong relationships with customers and regulatory agencies; and

Experienced and highly-skilled management, Board of Directors and Advisory Board.

Proprietary Patent Pending Technology

We presently have three patent applications pending related to our RPCs and two issued patents related to our other remediation technologies.

We believe, based on direct and ongoing conversations with our customers and third-party independent test results, that our technology is the only commercially available technology that can not only clean soil that contains greater than 7% hydrocarbon, but also preserve the hydrocarbons extracted from such soil for future use. We believe that this provides us with a true competitive advantage.

We believe our technology and service offerings will position us well to conduct our business in any geographical region in which soil or water has been contaminated by hydrocarbons.

Strong Relationships with Customers and Regulatory Agencies

We have developed close relationships with customers and government agencies, including the Utah School and Institutional Trust Lands Administration (“SITLA”) and the Kuwait Oil Company (“KOC”). Based on our existing relationship with SITLA, arising out of our having successfully completed a clean-up project for SITLA in the past, which the original provider was unable to complete, as well as further conversations with SITLA, we expect that SITLA will award additional projects to us in the future related to oil sands deposits located in Utah from SITLA. We also anticipate receiving additional contracts from KOC to remediate contaminated properties in Kuwait, based on our existing relationship with KOC and conversations with them.

Experienced and Highly Skilled Management, Board of Directors and Advisory Board

Our management team has started and successfully grown numerous technology-based companies and has utilized this experience to develop a strategic vision for the Company. The implementation of this plan has resulted in the acquisition and in-house development of numerous technologies, which are currently in operation. We have demonstrated the effectiveness of our technologies in both Vernal, Utah and Kuwait, accomplishing the clean-up of contaminated areas while also recovering precious metals through our metallic separation technology.

Our Board of Directors is comprised of accomplished professionals who bring decades of experience to the Company. Our Board of Directors includes a director who has served as a member of the Executive Committee of one of the largest global accounting firms and has served on the Board of Directors of two multi-billion dollar publicly traded companies, a former director of technology investment banking at Goldman Sachs, a successful investor and entrepreneur who has founded and provided initial financing for numerous life science companies, several of which have grown to become multi-billion dollar publicly traded companies, and the mayor of a city in Utah.

In addition, we have an Advisory Board comprised of Dr. Khalid Bin Jabor Al Thani and Ron Chevalier, former senior members of oil and gas companies, both in the United States and in the Middle East. Dr. Khalid Bin Jabor Al Thani, is an accomplished business professional and a member of a royal family based in the Middle East Mr. Chevalier is an experienced health and safety expert operating in the oil and gas industries.

We rely on our Board of Directors and Advisory Board to provide it both high level advice and guidance along with using their contacts to help open various markets. Additionally, the Advisory Board acts as a preliminary informal sounding board for the Board and management for these particular areas in which the Advisory Board members have expertise. We believe the combination of our management team, Board of Directors and Advisory Board provides us with a significant competitive advantage over our competitors due to their breadth of experiences and relationships. Presently, we do not pay compensation to the members of the Advisory Board.

Growth Strategies

We will strive to grow our business by pursuing the following strategies:

Expansion of our oil recovery projects in Utah;

Expansion of our remediation projects in Kuwait;

Expansion into new and complementary markets;

Increase of revenue via new service and product offerings;

Strategic acquisitions and licenses targeting complementary technologies; and

Redeployment of our metallic separation technologies.

Expansion of our Oil Recovery Projects in Utah

Expansion of our Remediation Projects in Kuwait

Our RPC technology was successfully used in our initial project for KOC in Kuwait, where we removed hydrocarbons from soil with more than 7% contamination and, following the process, the hydrocarbon contamination level of the soil was reduced to less than 0.5%, which was lower than the level needed to meet the project specifications. There is still approximately 26 million cubic meters of soil contaminated by oil as a result of the Iraqi invasion of Kuwait. We intend to seek additional contracts directly from KOC to deploy our RPCs for the remediation of this contaminated soil. Under our current contract, we will charge $72 per cubic meter of soil remediated. We are currently working with KOC and other government-controlled entities to expand our remediation projects in Kuwait. We are in active negotiations to provide the technology and operations as a subcontractor to large, multinational remediation companies within the region where our technology could be used on all of the sands with contamination levels greater than 7%. Other technologies may also be used for the less contaminated soils.

Expansion into New and Complementary Markets

We intend to explore expansion opportunities on a global basis, including in places with extreme contamination such as the Ogoni Lands region of Nigeria, oil spill lakes located in Saudi Arabia and Turkmenistan, and naturally occurring oil sands deposits in Kazakhstan, where we believe our technology and service offerings may provide a distinct competitive advantage. We are currently in discussions with several groups for deploying our RPCs for remediation projects (primarily for oil spills, tank bottom sludge and drill cuttings) in Saudi Arabia, Qatar and Texas. Saudi Arabia has the objective to create a circular carbon economy that will ultimately have zero wasted hydrocarbons. Our technology is able to process tank bottom sludge, drill cuttings, and soils from hydrocarbon spills, returning the sand to less than 0.5% contamination while reclaiming the oil for waste energy use.

Increase of Revenue via New Service and Product Offerings.

To date, we have focused on the remediation of soil contaminated by oil. We are in the process of expanding our services to include the remediation of water and the recovery of hydrocarbons from water through our exclusive license with solvAQUA. We also intend to target other hydrocarbon remediation businesses that focus on, among other things, the cleaning of tank bottom sludge and the cleaning of the water used from drilling oil wells. Oil producers generally pay to dispose of sludge at the bottom of storage tanks and contaminated water produced from the drilling of oil wells. We believe that our technologies could be used to clean these contaminated products, while simultaneously recovering the heavy crude. We believe we will be able to offer these services at a cost that is very competitive with current methods and that our ability to recover the heavy crude for resale will give us a competitive advantage. The patent pending RPC technology, in conjunction with the enzymatic water remediation technology that we have licensed from solvAQUA, have the potential to eradicate all oil evaporation ponds and landfills in the United States presently utilized for disposal of tank bottom sludge and drill cutting waste. We are currently in early stage discussions relating to some of these remediation projects.

Strategic Acquisitions and Licenses Targeting Complementary Technologies

We intend to seek out opportunities to acquire or license only specific technologies that are either complementary to our existing product offerings or that will allow us to expand into the environmental infrastructure markets. We are currently negotiating a license for smart sensor technologies for autonomous vehicles that we believe could be embedded directly into the asphaltic cement we intend to produce from the hydrocarbons we extract, providing the basis for smart roads and infrastructure. We believe that these sensors, which are self-powered, could be used to provide information about traffic, road conditions and repair needs as well as allowing the roads to communicate directly with autonomous vehicles enabling these vehicles to sense the road in all weather conditions. By complementing the asphaltic cement we expect to produce with integrated sensors for automated vehicles, we believe that we will be able to offer a smart road technology – moving this company from one of “Waste to Road” to one of “Waste to Smart Road”.

Redeployment of our Metallic Separation Technology

Our licensed metallic separation technology has successfully recovered precious metals including, but not limited to, gold, palladium, platinum, rodium and silver. We intend to modify our existing metallic separation equipment to allow us to capture a greater amount of the precious metals, which are typically wasted. We intend to redeploy our metallic separation technology machines in conjunction with our RPC machines to locations where precious metals have been detected in the soil and to standalone locations to process mine tailings and other soils.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common shares. The following, and other risks, are discussed more fully in the “Risk Factors” section of this prospectus:

	·	We are an early stage operating company and we are subject to substantial risks inherent in the establishment of a new business venture;

	·	We have historically suffered net losses and we may not be able to achieve or sustain future profitability;

	·	We will require additional funding beyond this contemplated offering to fund our operations generally and such funding may not be available on acceptable terms or at all;

	·	The COVID-19 pandemic has had and may continue to have a negative impact on our business and operations;

	·	We rely on the experience and knowledge of our management team, Board of Directors and Advisory Board, and the loss of one or more members of our management team, Board of Directors and/or Advisory Board would adversely impact our business;

· Our business is subject to extensive legal regulation and unexpected changes to law or increases to fees could have a significant adverse impact on our business;

· Our primary business is impacted by the oil industry and manufacturing industry, which are subject to uncertain economic conditions;

· We currently depend and are likely to continue to depend on a limited number of customers for a significant portion of our revenues; and

· We may not be able to adequately protect our proprietary rights.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. See “Risk Factors — Risks Relating to Our Common Stock and the Offering — We are an ‘emerging growth company’ and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.” These provisions include:

being permitted to provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

reduced disclosure obligations regarding executive compensation arrangements;

not being required to hold a non-binding advisory vote on executive compensation or golden parachute arrangements; and

exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We have irrevocably elected to opt-out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. As a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeded $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

Notwithstanding the above, we are also currently qualified as a “smaller reporting company” under SEC rules. In the event that we are still considered a smaller reporting company at such time as we cease to be an emerging growth company, the disclosure we will be required to provide in our filings with the SEC will increase, but will still be less than it would be if we were not considered either an emerging growth company or a smaller reporting company. Specifically, similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requiring that independent registered public accounting firms provide an attestation report on the effectiveness of their internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in their annual reports.

Corporate History and Information

We were Company was originally organized on November 1, 2006 as a limited liability company in the State of Nevada as Genecular Holdings, LLC. Our name was changed to NGI Holdings, LLC on November 3, 2006. On April 30, 2008, we converted to a Nevada corporation and changed our name to Vivakor, Inc. pursuant to Articles of Conversion filed with the Nevada Secretary of State.

We have the following direct and indirect wholly-owned active subsidiaries: VivaVentures Management Company, Inc., a Nevada corporation, VivaSphere, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, and RPC Design and Manufacturing LLC, a Utah limited liability company. We have a 99.95% ownership interest in VivaVentures Energy Group, Inc., a Nevada Corporation; the 0.05% minority interest in VivaVentures Energy Group, Inc. is held by a private investor unaffiliated with the Company. We also have an approximate 49% interest in Vivakor Middle East Limited Liability Company, a Qatar limited liability company.

Our address is 433 Lawndale Drive South Salt Lake City, UT 84115. Our phone number is (949) 281-2606. Our website is: www.vivakor.com. The information on, or that can be accessed through, this website is not part of this prospectus, and you should not rely on any such information in making the decision whether to purchase our common stock.

THE OFFERING

Common stock offered by us		shares of common stock, par value $0.001

Estimated public offering price		From $ to $ and the maximum number of securities offered is

Common stock to be outstanding after the offering:		shares. If the underwriter’s over-allotment option is exercised in full, the total number of shares of our common stock outstanding immediately after this offering will be .

Overallotment option:		We have granted the underwriters a 45-day option to purchase up to an additional shares of common stock to cover over-allotments, if any, at the public offering price less underwriting discounts and commissions.

Use of proceeds:		We expect to use the net proceeds from this offering to purchase two RPC units, together with related equipment and enhancements, for the continued development of our hydrocarbon upgrading technologies and for working capital and other general corporate purposes including the potential repayment of outstanding bridge notes. See “Use of Proceeds.”

Risk factors:		Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section of this prospectus beginning on page 10 before deciding to invest in our securities.

OTCPink Trading symbol:		Our common stock is currently quoted on the OTCPink under the trading symbol “VIVK”.

Proposed Nasdaq trading symbol:		We have applied to list our common stock on the Nasdaq Capital Market under the symbol “VIVK.” No assurance can be given that our application will be approved.

____________

The number of shares of common stock shown above to be outstanding after this offering is based on 338,708,562 shares outstanding as of January 26, 2021, and excludes the following:

	·	436,800 shares of common stock issuable upon the conversion of $56,420 of various convertible notes payable that convert at a range between $0.10 and $0.125 per share;

	·	1,325,637 shares of common stock issuable upon the conversion of $456,848 of certain convertible bridge notes that may be converted into common stock at the lesser of $0.40 or a discount of 20% to the offering price or repaid with the proceeds from this offering;

	·	2,580,055 shares of common stock issuable upon the conversion of $813,233 of certain convertible bridge notes that may, at the option of the Company, be converted into common stock at a discount of 20% to the offering price or repaid with the proceeds from this offering;

	·	60,000,000 shares of common stock reserved for future issuance under the new Vivakor Inc. 2020 Equity Incentive Plan (the “Vivakor 2020 Plan”) we intend to adopt immediately prior to this offering (including 500,000 shares to be issued to a former employee, options to purchase 10,000,000 shares to be issued to LBL Professional Consulting, Inc. for consulting services and options to purchase 5,000,000 shares to be issued to Matthew Nicosia, our Chief Executive Officer, pursuant to his employment agreement, all in the form of stock options that will be issued under the Vivakor 2020 Plan);

	·	Any shares that may be issuable in exchange for convertible notes or LLC units of Viva Wealth Fund I, LLC, Vivaventures Royalty II LLC, and/or Vivaventures Opportunity Fund pursuant to the respective operating agreements of such entities, as described in this prospectus.

Prior to the consummation of this offering, we expect to effect a -for- reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”). No fractional shares of the Company’s common stock will be issued as a result of the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share.

Unless otherwise stated, all information in this prospectus assumes:

the automatic conversion of all outstanding shares of our Series A, Series B, Series B-1 and Series C-1 convertible preferred stock into an aggregate of 53,198,023 shares of common stock, the conversion of which will occur immediately prior to the consummation of this offering.

no exercise of the underwriters’ over-allotment option to purchase additional shares;

no exercise of the warrants to be issued to the representative of the underwriters in connection with this offering as described in the “Underwriting — Representative’s Warrants” section of this prospectus; and

the completion of the Reverse Stock Split.

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following summary consolidated statements of operations data for the periods ended September 30, 2020 (unaudited) and September 30, 2019 (unaudited) and the years ended December 31, 2019 and 2018 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The historical financial data presented below is not necessarily indicative of our financial results in future periods. You should read the summary consolidated financial data in conjunction with those financial statements and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our consolidated financial statements are prepared and presented in accordance with United States generally accepted accounting principles, or U.S. GAAP. Our unaudited condensed interim consolidated financial statements have been prepared on a basis consistent with our audited financial statements and include all adjustments, consisting only of normal and recurring adjustments that we consider necessary for a fair presentation of the financial position and results of operations as of and for such periods.

	Nine Months Ended September 30,						Year Ended December 31,

	2020			2019			2019			2018
	(unaudited)						(audited)
Consolidated Statements of Operations Data:
Revenues	$	1,416,051		$	–		$	–		$	10,179
Cost of revenues		1,323,378			–			–			3,550
Gross profit		92,673			–			–			6,629
Total operating expenses		2,668,044			1,958,135			2,303,181			1,880,347
Loss from operations		(2,575,371	)		(1,958,135	)		(2,303,181	)		(1,873,718	)
Total other income		210,630			673,295			618,177			(362,282	)
Loss before provision for income taxes		(2,364,741	)		(1,284,840	)		(1,685,004	)		(2,236,000	)
Benefit (provision) for income taxes		102,492			(279,434	)		(589,203	)		36,645
Consolidated net loss	$	(2,262,249	)	$	(1,564,274	)	$	(2,274,207	)	$	(2,199,355	)
Net loss attributable to Vivakor, Inc.	$	(1,643,091	)	$	(1,501,475	)	$	(2,159,242	)	$	(2,178,345	)
Loss per common share- Basic	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Pro forma loss per common share- Basic⁽²⁾		(0.00	)		(0.01	)		(0.01	)		(0.01	)

	As of September 30, 2020
	Actual		Pro Forma⁽²⁾		Pro Forma As Adjusted⁽¹⁾
Selected Balance Sheet Data (end of period):			(unaudited)
Cash and marketable securities	$	1,290,085	$	1,290,085	$
Total assets		40,335,597		40,335,597
Total debt		6,727,969		6,727,969
Total liabilities		14,761,206		14,761,206
Total temporary equity		13,189,585		–
Total stockholders’ equity		12,384,806		25,574,391

(1) Each $0.10 increase (decrease) in the public offering price per share would increase (decrease) each of cash and marketable securities, total assets and total shareholders’ equity by approximately $ , assuming that the number of shares we are offering, as set forth on the cover page of this prospectus, remains the same and that the underwriters do not exercise their over-allotment option. Depending on market conditions and other considerations at the time we price this offering, we may sell a greater or lesser number of shares than the number set forth on the cover page of this prospectus. An increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) each of cash and marketable securities, total assets and total shareholders’ equity by approximately $ , assuming the public offering price per share remains the same.

(2) Pro forma information has been prepared giving the effect of the conversion of preferred stock in conjunction with this Offering. Separate pro forma earnings per share information has been prepared in the statements of operations for the quarter ended September 30, 2020 and for the years ended December 31, 2019 and 2018, giving the effect of the conversion of certain preferred stock in conjunction with this Offering.

RISK FACTORS

Investing in our common stock involves a great deal of risk. Careful consideration should be made of the following factors as well as other information included in this prospectus before deciding to purchase our common stock. There are many risks that affect our business and results of operations, some of which are beyond our control. Our business, financial condition or operating results could be materially harmed by any of these risks. This could cause the trading price of our common stock to decline, and you may lose all or part of your investment. Additional risks that we do not yet know of or that we currently think are immaterial may also affect our business and results of operations.

Risks Relating to our Business

We are at an early operational stage, and our success is subject to the substantial risks inherent in the establishment of a new business venture.

Our business and operations are in an early stage and subject to all of the risks inherent with new business ventures. Our initial operations have been focused 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. We intend to, but have not yet, completed the second stage of our operational strategy, selling the asphaltic cement and/or other petroleum-based products we are able to produce from the hydrocarbons we recover.

Our business and operations may not prove to be successful. We have deployed only two RPC units to date, including one unit to Kuwait (for which operations have been temporarily suspended due to COVID-19) and another to Vernal, Utah (which is presently operating). We will need to scale our 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 will depend on many factors, some of which may be beyond our control, and others which cannot be predicted at this time. Although we began operations in 2008 as a technology acquisition company primarily focused on medical technologies, we have only been operating under our current business plan focused on soil remediation since 2011, and we have not yet proven to be profitable. We have not yet sold any substantial amount of products or services commercially and have not proven that our business model will allow us to identify and develop commercially feasible products or technologies.

We have historically suffered net losses, and we may not be able to sustain profitability.

We had an accumulated deficit of $29,491,591 as of September 30, 2020, and we expect to continue to incur significant development expenses in the foreseeable future related to the completion of the development and commercialization of our products. As a result, we are incurring operating and net losses, and it is possible that we may never be able to sustain the revenue levels necessary to achieve and sustain profitability. If we fail to generate sufficient revenues to operate profitably on a consistent basis, or if we are unable to fund our continuing losses, you could lose all or part of your investment.

We have substantial doubt in our ability to continue as a going concern.

The accompanying financial statements have been prepared assuming we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. Our independent registered public accounting firm has issued a report that includes an explanatory paragraph referring to our recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available.

We will need additional financing to continue to fund our operations. We may raise capital through loans from current stockholders, public or private equity or debt offerings, grants, or strategic arrangements with third parties. There can be no assurance that additional capital will be available to us on acceptable terms, or at all.

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.

Our future success will depend in large part on our ability to attract and retain high-quality management, operations, and other personnel who are in high demand, are often subject to competing employment offers, and are attractive recruiting targets for our competitors. The loss of qualified executives and key employees, or our inability to attract, retain, and motivate high-quality executives and employees required for the planned expansion of our business, may harm our operating results and impair our ability to grow.

We depend on the continued services of our key personnel, including Matthew Nicosia, our Chief Executive Officer, Tyler Nelson, our Chief Financial Officer, and Daniel Hashim, our Chief Scientific Officer. 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.

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.

We expect to continue to devote significant capital resources to fund the continued development of our RPCs and related technologies. In order to support the initiatives envisioned in our business plan, we will need to raise additional funds through the sale of public or private debt or equity financing or other arrangements. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects for development of competitive technologies by others. Sufficient additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our common stock.

We expect to obtain additional capital during 2020 through financing lease structures for our RPCs or other financing structures related to our RPCs. We also expect that the net proceeds from this offering, along with our current cash position, will enable us to fund our operating expenses and capital expenditure requirements for the next twelve months. Thereafter, unless we can achieve and sustain profitability, we anticipate that we will need to raise additional capital to fund our operations while we implement and execute our business plan.

Any future equity financing may involve substantial dilution to our then existing shareholders. Any future debt financing could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. There can be no assurance that such additional capital will be available, on a timely basis, or on terms acceptable to us. If we are unsuccessful in raising additional capital or the terms of raising such capital are unacceptable, then we may have to modify our business plan and/or curtail our planned activities and other operations.

If we raise additional funds through government or other third-party funding, collaborations, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue stream or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products that we would otherwise prefer to develop and market ourselves.

The COVID-19 pandemic has had and may continue to have a negative impact on our business and operations.

Our Kuwait operations have been suspended to comply with the social distancing measures implemented in Kuwait. Our Utah operations were temporarily suspended from March through May 2020, but have since resumed in full. These suspensions have had a negative impact on our business and there can be no guaranty that we will not need to suspend operations again in the future as a result of the pandemic. We are closely monitoring the COVID-19 pandemic and the directives from federal and local authorities in the United States and in Kuwait affecting not only our workforce, but those of companies with whom we work.

Economic conditions in the current period of disruption and instability could adversely affect our ability to access the capital markets, in both the near and long term, and thus adversely affect our business and liquidity.

The current economic conditions related to the COVID-19 pandemic have had, and likely will continue to have for the foreseeable future a negative impact on the capital markets. Even if we are able to raise capital, it may not be at a price or on terms that are favorable to us. We cannot predict the occurrence of future disruptions or how long the current conditions may continue.

Failure to effectively manage our expected growth could place strains on our managerial, operational and financial resources and could adversely affect our business and operating results.

Our expected growth could place a strain on our managerial, operational and financial resources. Further, if our subsidiaries’ businesses grow, then we will be required to manage multiple relationships. Any further growth by us or our subsidiaries, or any increase in the number of our strategic relationships, will increase the strain on our managerial, operational and financial resources. This strain may inhibit our ability to achieve the rapid execution necessary to implement our business plan and could have a material adverse effect on our financial condition, business prospects and operations and the value of an investment in our company.

We will need to achieve commercial acceptance of our products to continue to generate revenues and sustain profitability.

Our goal is to ultimately produce asphaltic cement and/or other petroleum-based products from the hydrocarbons we recover and sell these products to customers; however, we may not be able to successfully commercialize our products, and even if we do, we may not be able to do so on a timely basis. Superior competitive technologies may be introduced, or customer needs may change, which will diminish or extinguish the commercial uses for our applications. We cannot predict when significant commercial market acceptance for our products will develop, if at all, and we cannot reliably estimate the projected size of any such potential market. If the markets fail to accept our products, then we may not be able to generate revenues from the commercial application of our technologies. Our revenue growth and profitability will depend substantially on our ability to manufacture and deploy additional RPCs and produce asphaltic cement to the specifications required by each of our potential customers.

We have identified certain material weakness in our internal control over financial reporting. Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our common stock. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), requires that we maintain internal control over financial reporting that meets applicable standards. We may err in the design or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met. Because there are inherent limitations in all control systems, there can be no assurance that all control issues have been or will be detected. If we are unable, or are perceived as unable, to produce reliable financial reports due to internal control deficiencies, investors could lose confidence in our reported financial information and operating results, which could result in a negative market reaction and a decrease in our stock price.

We have identified certain material weaknesses in our internal controls related to revenue recognition and lack of staffing in the accounting and finance organization. In connection with these material weaknesses, in 2020, we implemented remediation measures including training of accounting personnel as well as hiring additional personnel with experience in the ongoing identification, including the implementation of an audit committee, design and implementation of internal control over financial reporting. We believe that we have substantially resolved our previously identified material weaknesses in our internal controls as a result of implementation of new policies and procedures, the completion of an audit of our financial statements and the addition of experienced, independent directors and committees. There can be no assurances that weakness in our internal controls will not occur in the future.

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.

A major portion of our business is dependent on the oil industry, which is subject to numerous worldwide variables.

Our prospective customers are concentrated in the oil industry. As a result, we will be subject to the success of the oil industry, which is subject to substantial volatility based on numerous worldwide factors. A decline in the oil industry may 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. We will compete with other participants in the search for oil sand properties and in the marketing of oil and other hydrocarbon products. 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.

Within the oil remediation market, demand for our services will be limited to a specific customer base and highly correlated to the oil industry. The oil industry’s demand for equipment is affected by a number of factors including the volatile nature of the oil industry’s business, increased use of alternative types of energy and technological developments in the oil extraction process. A significant reduction in the target market’s demand for oil would reduce the demand for the equipment, which would have a material adverse effect upon our business, financial condition, results of operations and cash flows.

Low oil prices may substantially impact our ability to generate revenues.

Low oil prices may negatively impact our ability to operate. The demand for our products and services depend, in part, on the price of oil and the margins oil producers receive on the sale of oil. Oil prices are volatile and can fluctuate widely based upon a number of factors beyond our control. Any decline in the prices of and demand for oil could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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.

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.

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.

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.

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 comply with these regulations.

Current and future government laws, regulations and other legal requirements may increase the costs of doing business or restrict business operations. Laws, regulations and other legal requirements, such as those relating to the protection of the environment and natural resources, health, business and tax have an effect on our cost of operation or those of our customers. Such governmental regulation may result in delays, cause us to incur substantial compliance and other costs and prohibit or severely restrict our business or that of our customers, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

Based on the nature of our business we currently depend and are likely to continue to depend on a limited number of customers for a significant portion of our revenues.

We currently have two customers in Utah and a single customer in Kuwait. 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.

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.

Our primary business is impacted by the oil industry and the manufacturing industry, which are subject to uncertain economic conditions.

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.

We will continue to be subject to competition in our business.

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.

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:

develop and expand their product offerings more rapidly;

adapt to new or emerging changes in customer requirements more quickly;

take advantage of acquisition and other opportunities more readily; and

devote greater resources to the marketing and sale of their products and adopt more aggressive pricing policies than we can.

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.

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.

We may be unable to adequately protect our proprietary rights.

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:

Our applications for patents relating to our business may not be granted and, if granted, may be challenged or invalidated;

Issued patents may not provide us with any competitive advantages;

Our efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology;

Our efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those we develop; or

Another party may obtain a blocking patent and we would need to either obtain a license or design around the patent in order to continue to offer the contested feature or service in our products.

We may become involved in lawsuits to protect or enforce our patents that would be expensive and time consuming.

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.

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.

Our primary business 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.

The availability and reliability of transportation and fluctuation in transportation costs could negatively impact the business. Transportation logistics play an important role in the sale of our products and services and in the oil industry generally. Delays and interruptions of transportation services because of accidents, failure to complete construction of infrastructure, infrastructure damage, lack of capacity, weather-related problems, governmental regulation, terrorism, strikes, lock-outs, third-party actions or other events could impair the operations of our customers and may also directly impair our ability to commence or complete production or services, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The lands on which we conduct our business operations must be properly zoned for our services. If they aren’t then it could impact our business.

The lands on which we conduct our business operates must comply with applicable zoning regulations. Any unknown or future violations could limit or require us to cease operations.

Data security breaches are increasing worldwide. If we are the victim of such a breach it will materially impact our business.

We will collect and retain certain personal information provided by our employees and investors. We intend to implement certain protocols designed to protect the confidentiality of this information and periodically review and improve our security measures; however, these protocols may not prevent unauthorized access to this information. Technology and safeguards in this area are consistently changing and there is no assurance that we will be able to maintain sufficient protocols to protect confidential information. Any breach of our data security measures and disbursement of this information may result in legal liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect our business and financial performance.

We may indemnify our directors and officers against liability to us and holders of our securities, and such indemnification could increase our operating costs.

Our bylaws allow us to indemnify our directors and officers against claims associated with carrying out the duties of their offices. Our Bylaws also allow us to reimburse them for the costs of certain legal defenses. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to our directors, officers or control persons, we have been advised by the SEC that such indemnification is against public policy and is therefore unenforceable. If our officers and directors file a claim against us for indemnification, the associated expenses could also increase our operating costs.

We may be subject to liability if our equipment does not perform as expected.

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.

Our business depends 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.

Our business involves manufacturing and plant operation risks of delay that may be outside of our control. Production or services may be delayed or prevented by factors such as adverse weather, strikes, energy shortages, shortages or increased costs of materials, inflation, environmental conditions, legal matters and other unknown contingencies. Our business also requires certain manufacturing apparatus to manufacture the equipment. If the manufacturing apparatus were to suffer major damage or are destroyed by fire, abnormal wear, flooding, incorrect operation or otherwise, we may be unable to replace or repair such apparatus in a timely manner or at a reasonable cost, which would impact the our ability to stay in production or service. Any significant downtime of the equipment manufacturing could impair our ability to produce for or serve customers and materially and adversely affect our results of operations. In addition, changes in the equipment plans and specifications, delays due to compliance with governmental requirements or impositions of fees or other delays could increase production costs beyond those budgeted for the business. If any cost overruns exceed the funds budgeted for operations, the business would be negatively impacted.

Any accident at our manufacturing facilities could subject us to substantial liability.

The manufacturing and operation of the equipment involves hazards and risks which could disrupt operations, decrease production and increase costs. The occurrence of a significant accident or other event that is not fully insured could adversely affect our business, financial condition, results of operations and cash flows.

If critical components become unavailable or our suppliers delay their production of our key components, our business will be negatively impacted.

Our ability to get key components to build our equipment is crucial to our ability to manufacture our products. These components are supplied by certain third-party manufacturers, and we may be unable to acquire necessary amounts of key components at competitive prices.

If we are successful in our growth, outsourcing the production of certain parts and components would be one way to reduce manufacturing costs. We plan to select these particular manufacturers based on their ability to consistently produce these products according to our requirements in an effort to obtain the best quality product at the most cost-effective price. However, the loss of all or any one of these suppliers or delays in obtaining shipments would have an adverse effect on our operations until an alternative supplier could be found, if one may be located at all. If we get to that stage of growth, such loss of manufacturers could cause us to breach any contracts we have in place at that time and would likely cause us to lose sales.

Any shortage of skilled labor would have a detrimental impact on our ability to provide our products and services.

The manufacturing and operating of the equipment requires skilled laborers. In the event there is a shortage of labor, including skilled labor, it could have an adverse impact on our productivity and costs and our ability to expand production in the event there is an increase in demand for our product or services.

We rely on third party contractors for some of our operations. If we are unable to find quality contractors, it would severely impact our business.

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.

Union activities could adversely impact our business.

While none of our employees are currently members of unions, we may become adversely effected by union activities. We are not subject to any collective bargaining or union agreement; however, it is possible that future employees may join or seek recognition to form a labor union or may be required to become a labor agreement signatory. If some or all of our employees become unionized, it could adversely affect productivity, increase labor costs and increase the risk of work stoppages. If a work stoppage were to occur, it could interfere with the business operations and have a material adverse effect on our business, financial condition, results of operations and cash flows.

Although we do not believe that we are, or will be, an investment company covered by the Investment Company Act of 1940, if we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to engage in strategic transactions.

A company that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, owning, trading or holding certain types of securities would be deemed an investment company under the Investment Company Act of 1940, as amended, (the “Investment Company Act”). 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 and Odyssey Group International, 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 investments in Scepter Holdings and Odyssey Group International arise from loan agreements that were settled in the form of equity because cash was not available for the borrowers. 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 manufacturing heavy machinery or to provide the Company with cash to specifically manufacture or purchase heavy machinery in exchange for a royalty from the production of the heavy machinery. 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.

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. 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.

If we are nevertheless deemed to be an investment company under the Investment Company Act, we may be subject to certain restrictions that may make it more difficult for us to complete a business combination, including:

	•	restrictions on the nature of our investments; and
	•	restrictions on the issuance of securities.

In addition, we may have imposed upon us certain burdensome requirements, including:

	•	registration as an investment company;
	•	adoption of a specific form of corporate structure; and
	•	reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

Compliance with these additional regulatory burdens would require additional expense for which we have not allotted.

Risks Relating to our Common Stock and the Offering

Future sales or potential sales of our common stock in the public market could cause our share price to decline.

If the existing holders of our common stock, particularly our directors and officers, sell a large number of shares, they could adversely affect the market price for our common stock. Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline.

Because we will not pay dividends on our common stock in the foreseeable future, stockholders will only benefit from owning common stock if it appreciates.

We have never paid cash dividends on our common stock, and we do not intend to do so in the foreseeable future. We intend to retain any future earnings to finance our growth. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase our common stock.

Our share price has been, and will likely continue to be, volatile, and you may be unable to resell your shares at or above the price at which you acquired them.

The trading price of our common stock has been, and is likely to continue to be, highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.

The market price for our securities may be influenced by many factors that are beyond our control, including, but not limited to:

variations in our revenue and operating expenses;

market conditions in our industry and the economy as a whole;

actual or expected changes in our growth rates or our competitors’ growth rates;

developments or disputes concerning patent applications, issued patents or other proprietary rights;

developments in the financial markets and worldwide or regional economies;

variations in our financial results or those of companies that are perceived to be similar to us;

announcements by the government relating to regulations that govern our industry;

sales of our common stock or other securities by us or in the open market;

changes in the market valuations of other comparable companies;

general economic, industry and market conditions; and

the other factors described in this “Risk Factors” section.

The trading price of our shares might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others, could harm the value of your investment in our securities. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results and financial condition.

Investors in this offering will experience immediate and substantial dilution in net tangible book value.

The public offering price per share will be substantially higher than the net tangible book value per share of our outstanding shares of common stock. As a result, investors in this offering will incur immediate dilution of $ per share, based on the estimated public offering price of $ per share. Investors in this offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this offering.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.

If our common stock is approved for listing on the Nasdaq Capital Market and we subsequently fail to meet any of Nasdaq’s continued listing requirements, our common stock may be delisted. In addition, our Board of Directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from the Nasdaq Capital Market may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.

If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. Although the shares being offered will not initially be subject to the penny stock rules, if we do not retain a listing on the Nasdaq Capital Market or another national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

The proposed Reverse Stock Split may decrease the liquidity of our common stock.

The liquidity of our common stock may be affected adversely by the proposed Reverse Stock Split given the reduced number of common stock that will be outstanding following the reverse stock split. In addition, the reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their common stock and greater difficulty effecting such sales.

Following the Reverse Stock Split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a common stock price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section of this prospectus entitled “Use of Proceeds.” You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Sales of a substantial number of shares of our common stock following this offering may adversely affect the market price of our common stock and the issuance of additional shares will dilute all other stockholders.

Sales of a substantial number of shares of our common stock in the public market or otherwise following this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock. After completion of this offering at an estimated offering price of $ per share, which is the midpoint of our bona fide estimated price range of $ to $ , our existing stockholders will own approximately % of our common stock assuming there is no exercise of the underwriters’ over-allotment option.

After completion of this offering at an estimated offering price of $ per share, which is the midpoint of our bona fide estimated price range of $ to $ , there will be shares of our common stock outstanding. In addition, our articles of incorporation, as amended, will permit the issuance of up to approximately additional shares of common stock after the completion of this offering. Thus, we will have the ability to issue substantial amounts of common stock in the future, which would dilute the percentage ownership held by the investors who purchase shares of our common stock in this offering.

We and our officers, directors and certain stockholders have agreed, subject to customary exceptions, not to, without the prior written consent of , the representative of the underwriters, during the period ending 180 days from the date of this offering in the case of us and our directors and officers, and 90 days from the date of this offering in the case of our stockholders who beneficially own more than 5% of our common stock directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of any of shares of our common stock, enter into any swap or other derivatives transaction that transfers to another any of the economic benefits or risks of ownership of shares of our common stock, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of common stock or securities convertible into or exercisable or exchangeable for common stock or any other securities of the Company or publicly disclose the intention to do any of the foregoing.

Anti-takeover provisions in our charter documents and Nevada law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.

We are a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. In addition, our articles of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Our articles of incorporation and bylaws:

authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt;

provide that vacancies on our Board of Directors, including newly created directorships, may be filled by a majority vote of directors then in office;

place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders;

do not provide stockholders with the ability to cumulate their votes; and

provide that our Board of Directors or a majority of our stockholders may amend our bylaws.

We are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that present our current expectations or forecasts of future events. These statements do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties and include statements regarding, among other things, our projected revenue growth and profitability, our growth strategies and opportunity, anticipated trends in our market and our anticipated needs for working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. These statements may be found under the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as in this prospectus generally. In particular, these include statements relating to future actions, prospective products, market acceptance, future performance or results of current and anticipated products, sales efforts, expenses, and the outcome of contingencies such as legal proceedings and financial results.

Examples of forward-looking statements in this prospectus include, but are not limited to, our expectations regarding our business strategy, business prospects, operating results, operating expenses, working capital, liquidity and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products and services, the cost, terms and availability of components, pricing levels, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These statements are based on our management’s expectations, beliefs and assumptions concerning future events affecting us, which in turn are based on currently available information. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

changes in the market acceptance of our products and services;

increased levels of competition;

changes in political, economic or regulatory conditions generally and in the markets in which we operate;

our relationships with our key customers;

adverse conditions in the industries in which our customers operate;

our ability to retain and attract senior management and other key employees;

our ability to quickly and effectively respond to new technological developments;

our ability to protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the Company; and

other risks, including those described in the “Risk Factors” discussion of this prospectus.

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this prospectus are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of the shares that we are offering will be approximately $ (or approximately $ if the underwriter exercises its option to purchase additional shares of common stock from us in full), based on an estimated offering price of $ per share, which is the midpoint of our bona fide estimated price range of $ to $ , and after deducting the underwriting discounts and commissions and estimated offering expenses.

We currently expect to use the net proceeds of this offering primarily for the following purposes:

	·	approximately $ for the purchase of two RPC units, together with related equipment and enhancements;

	·	approximately $ towards the continued development of our hydrocarbon upgrading technologies; and

	·	the remaining $ for working capital and other general corporate purposes, including potential repayment of outstanding bridge notes.

Each $0.10 increase or decrease in the estimated public offering price of $ per share would increase or decrease our net proceeds from this offering by approximately $ million , assuming that the number of shares offered by us remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease of 1,000,000 in the number of shares offered by us would increase or decrease our net proceeds from this offering by approximately $ million, assuming no change in the estimated public offering price per share, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the offering price or the number of shares by these amounts would have a material effect on our intended uses of the net proceeds from this offering, although it may impact the amount of time prior to which we may need to seek additional capital.

We believe that the net proceeds from this offering together, along with our current cash position, will be sufficient to fund our operations for at least the next 12 months, although we cannot assure you that this will occur.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. The amount and timing of our actual expenditures will depend on numerous factors, including the status of our development efforts, sales and marketing activities and the amount of cash generated or used by our operations. We may find it necessary or advisable to use portions of the proceeds for other purposes, and we will have broad discretion and flexibility in the application of the net proceeds. Pending these uses, the proceeds will be invested in short-term bank deposits.

MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Market and Other Information

Our common stock is quoted on the OTCPink Marketplace operated by OTC Markets Group Inc. (the “OTCPink”) under the trading symbol “VIVK”. We have applied to list our common stock on the Nasdaq Capital Market under the symbol “VIVK”.

Immediately following the offering, we expect to have one class of common stock outstanding. As of January 26, 2021, there were approximately 476 registered holders of record of our common stock, and the last reported sale price of our common stock on the OTCPink was $0.40 per share on February 11, 2021. OTCPink does not constitute an established public trading market. Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Dividend Policy

To date, we have not paid any dividends on our common stock and do not anticipate paying any dividends in the foreseeable future. The declaration and payment of dividends on the common stock is at the discretion of our Board of Directors and will depend on, among other things, our operating results, financial condition, capital requirements, contractual restrictions or such other factors as our Board of Directors may deem relevant. We currently expect to use all available funds to finance the future development and expansion of our business and do not anticipate paying dividends on our common stock in the foreseeable future.

CAPITALIZATION

The following table sets forth our consolidated cash and capitalization as of September 30, 2020. Such information is set forth on the following basis:

actual basis; and

on a pro forma basis after giving effect to the conversion of all of our preferred stock outstanding immediately prior to this offering into 66,097,636 shares of common stock; and

on a pro forma as adjusted basis, giving further effect to the sale by us of shares of common stock in this offering at an estimated offering price of $ per share, which is the midpoint of our bona fide estimated price range of $ to $ , after deducting underwriting discounts and commissions and estimated offering expenses.

The information below is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus.

	Actual (unaudited)			Pro Forma As Adjusted (unaudited)			As Adjusted (unaudited)
Cash and marketable securities	$	3,096,732			3,096,732		$
Total liabilities		14,761,206			14,761,206
Temporary equity:
Redeemable, convertible preferred stock, $0.01 par value; 348,000,000 shares authorized;
Series B – 12.5% cumulative, 9,594,496 shares issued and outstanding as of September 30, 2020;		1,918,900			0
Series B-1, 18,787,319 shares issued and outstanding as of September 30, 2020;		4,696,852			0
Series C-1 – 12,715,821 shares issued and outstanding as of September 30, 2020		6,573,833			0
Total temporary equity		13,189,585			0
Stockholders’ Equity
Preferred stock, $0.001 par value; 2,000,000 shares authorized:
Series A, 2,000,000 shares issued and outstanding as of September 30, 2020;		2,000			0
Common stock, $0.001 par value; 1,250,000,000 shares authorized; 323,857,164 shares and 389,954,800 shares outstanding as of September 30, 2020 on an actual and pro-forma adjusted basis, respectively		323,857			389,955
Additional paid in capital		40,395,732			53,521,219
Treasury Stock, at cost		(20,000	)		(20,000	)
Accumulated deficit		(29,491,591	)		(29,491,591	)
Total Vivakor, Inc. stockholders’ equity		11,209,998			24,399,583
Equity attributed to noncontrolling interests	$	1,174,808			1,174,808
Total Stockholders’ equity (deficit)
Total Capitalization	$	12,384,806		$	25,574,391

Each $0.10 increase or decrease in the estimated public offering price of $ per share would increase or decrease, as applicable, our cash, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ million, assuming that the number of shares offered by us remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase or decrease of 1,000,000 shares to the shares offered by us in the offering would increase or decrease the amount of our cash and total stockholders’ equity by approximately $ million, assuming a public offering price of $ per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The above discussion and table is based on 389,884,887 outstanding shares of common stock as of September 30, 2020 after taking into account the conversion of all of our preferred stock outstanding immediately prior to this offering into 66,097,636 shares of common stock, and excludes:

	·	1,060,000 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $0.40 per share;

	·	166,263 shares of common stock issuable upon the conversion of $81,696 of various convertible notes payable that convert at a range between $0.10 and $0.25;

	·	906,691 shares of common stock issuable upon the conversion of $400,779 of certain convertible bridge notes that may, at the option of the Company, be converted into common stock at a discount of 20% to the offering price or repaid with the proceeds from this offering;

	·	60,000,000 shares of common stock reserved for future issuance under the new Vivakor Inc. 2020 Equity Incentive Plan (the “Vivakor 2020 Plan”) we intend to adopt immediately prior to this offering (including 500,000 shares to be issued to a former employee, options to purchase 10,000,000 shares to be issued to LBL Professional Consulting, Inc. for consulting services and options to purchase 5,000,000 shares to be issued to Matthew Nicosia, our Chief Executive Officer, pursuant to his employment agreement, all in the form of stock options that will be issued under the Vivakor 2020 Plan);

	·	Any shares that may be issuable in exchange for LLC units of Vivaventures Royalty II LLC and/or Vivaventures Opportunity Fund pursuant to the respective operating agreements of such entities, as described in this prospectus.

DILUTION

If you invest in our securities, your ownership interest will be diluted immediately to the extent of the difference between the public offering price per share you pay in this offering and the as adjusted net tangible book value per share of common stock immediately following this offering.

Net tangible book value per common share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding. Our net tangible book value as of September 30, 2020 was approximately $8,237,794 or $0.025 per share of common stock, based upon 323,857,164 shares of common stock outstanding.

Our pro forma net tangible book value as of September 30, 2020 was approximately $8,237,794, or $0.021 per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of shares of our common stock outstanding, as of September 30, 2020, after giving effect to the conversion of all of our preferred stock outstanding immediately prior to this offering into 66,097,636 shares of common stock.

After giving effect to the sale of shares of common stock in this offering, at the estimated offering price of $ per share, which is the midpoint of our bona fide estimated price range of $ to $ , and after deducting the underwriting discount and commission and our estimated offering expenses, our as adjusted net tangible book value as of September 30, 2020 would have been $ or $ per share. This represents an immediate increase in net tangible book value (deficit) of $ per share to existing stockholders and an immediate dilution of $ per share to new investors purchasing shares in the offering. If the public offering price is higher or lower than the estimated public offering price, the dilution to new investors will be greater or lower, respectively.

The following table illustrates this per share dilution:

Estimated public offering price per share			$
Net tangible book value per share	$	0.025
Decrease per share due to the conversion of all shares of preferred stock		0.004
Pro forma net tangible book value per share as of September 30, 2020		0.021
Increase in net tangible book value per share attributable to new investors
Pro forma as adjusted net tangible book value per share after this offering
Dilution in net tangible book value per share to new investors			$

If the underwriter’s overallotment option is exercised in full, the pro forma as adjusted net tangible book value following the offering will be $ per share, and the dilution to new investors in the offering will be $ per share.

A $0.10 increase (decrease) in the estimated public offering price of $ per share would result in an incremental increase (decrease) in our pro forma as adjusted net tangible book value of approximately $ million or approximately $ per share, and would result in an incremental increase (decrease) in the dilution to new investors of approximately $ per share, assuming that the number of shares of our common stock sold by us in this offering remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

We may also increase or decrease the number of shares of common stock we are offering in this offering. An increase (decrease) of 1,000,000 shares in the estimated number of shares of common stock sold by us in this offering would result in an incremental increase (decrease) in our as adjusted net tangible book value of approximately $ million, or approximately $ per share, and would result in an incremental increase (decrease) in the dilution to new investors of $ per share, assuming that the estimated public offering price of the common stock remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The information above is based on 323,857,164 outstanding shares of common stock as of September 30, 2020 after taking into account the conversion of all of our preferred stock outstanding immediately prior to this offering into 66,097,636 shares of common stock, and excludes:

	·	1,060,000 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $0.40 per share;

	·	166,263 shares of common stock issuable upon the conversion of $81,696 of various convertible notes payable that convert at a range between $0.10 and $0.25;

	·	906,691 shares of common stock issuable upon the conversion of $400,779 of certain convertible bridge notes that may, at the option of the Company, be converted into common stock at a discount of 20% to the offering price or repaid with the proceeds from this offering;

	·	60,000,000 shares of common stock reserved for future issuance under the new Vivakor Inc. 2020 Equity Incentive Plan (the “Vivakor 2020 Plan”) we intend to adopt immediately prior to this offering (including 500,000 shares to be issued to a former employee, options to purchase 10,000,000 shares to be issued to LBL Professional Consulting, Inc. for consulting services, and options to purchase 5,000,000 shares to be issued to Matthew Nicosia, our Chief Executive Officer, pursuant to his employment agreement, all in the form of stock options that will be issued under the Vivakor 2020 Plan);

	·	Any shares that may be issuable in exchange for LLC units of Vivaventures Royalty II LLC and/or Vivaventures Opportunity Fund pursuant to the respective operating agreements of such entities, as described in this prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the “Summary Statements of Operations Data” and our consolidated financial statements and the notes to those statements appearing elsewhere in this prospectus. This discussion and analysis contains forward-looking statements reflecting our management’s current expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of events may differ materially from those described in or implied by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this prospectus particularly on page 10 entitled “Risk Factors”.

Overview

Plan of Operation

We are focused on the remediation of contaminated soil and water resulting from either man-made spills or naturally occurring deposits of oil. Our primary focus has been the remediation of oil spills resulting from the Iraqi invasion of Kuwait and naturally occurring oil sands deposits in the Uinta basin located in Eastern Utah. We plan to expand into other markets, both in Utah and globally, where we believe our technology and services will provide a distinct competitive advantage over our competition.

We have historically suffered net losses, including net losses of approximately $2,159,242 million and $2,178,345 million for the years ended December 31, 2019 and 2018, respectively. We had an accumulated deficit of $29,491,591 as of September 30, 2020. We expect to experience continuing operating losses and negative cash flows from operations for the foreseeable future as our management executes our current business plan.

We will need to raise additional capital in order to scale up production and deployment of our RPCs. We may continue to sell our equity investments that are traded in an active market to raise capital, as well as our precious metal concentrate, assuming there is demand and we are able to negotiate acceptable contract terms. We may need to raise additional capital through loans from current stockholders, public or private equity or debt offerings, grants, or strategic arrangements with third parties. There can be no assurance that additional capital will be available to us on acceptable terms, or at all. If we are not able to obtain additional financing on a timely basis, we may be required to scale down or perhaps even cease the operation of our business. The issuance of additional equity securities could result in a significant dilution in the equity interests of our stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we are unable to raise additional capital, we will need to adjust our current business plan.

We have no material commitments or contractual purchase obligations for the next twelve months.

Working Interest Agreements

To assist in the funding for the manufacture of our first two RPCs, between 2015 and 2017, we entered into working interest agreements with Vivaventures UTSI LLC (“VV UTSI”) and Vivaventures Royalty II LLC (“VV RII”), respectively, pursuant to which VV UTSI and VV RII purchased revenue participation rights and working interest payables in exchange for payments to us of $5 million and $8 million, respectively. VV UTSI and VV RII are investment limited liability companies that are pass through entities to individual investors that have purchased Class B Units in these entities. The working interest agreements require us to make quarterly payments to VV UTSI and VV RII equal to 25% of the gross revenues that we generate from our RPCs for such quarter for 20 years after operations commence. The investors in these entities are entitled to receive their pro rata portion of these payments. These agreements also require us to make working interest budget payments to VV UTSI and VV RII, which are accounted for as a working interest payable. The working interest payable is paid down through pass-through expenses or cash according to the contract. The agreements give each of VV UTSI and VV RII a security interest in all of our collateral, including a security interest in 20 million shares of our common stock; the security interest in VV UTS1 has been released. Holders of VV RII Class B Units have the right to exchange their Class B Units for our common stock any time after the one year anniversary of their date of purchase and before the date that is 10 years and six months after the date they purchased their Class B Units. The number of shares of our common stock to be issued upon exchange will be determined by the fair market value of the LLC units and the discount to market ranging from between 5% and 20% depending on the year of exchange. The working interest agreements with VV UTSI and VV RII are accounted for as debt. For further information on these working interest agreements, see Note 16 in the Notes to the Audited Consolidated Financial Statements. In 2016 and 2017, the VV UTSI investors were issued an aggregate of 3,390,000 shares of our Series B-1 Preferred Stock, with a relative fair value of $0.25 per share at the time of issuance as additional consideration for their original investment. The Company also issued 3,185,000 common stock purchase warrants to these investors. The relative fair value of the warrants and the Series B-1 preferred stock in aggregate was $1,488,550, and was recorded as a debt discount, which is amortized to interest expense over the term of the working interest agreements using the effective interest method. The Company issued an additional 768,160 shares of Series C-1 Preferred Stock to these investors in order to compensate them for our first RPC unit having been taken offline in May 2018 to be shipped to Kuwait for remediation services. We anticipate making estimated annual payments of $1,960,000 during 2021 under the terms of these agreements based on revenue projections for the RPCs.

VV UTSI is a Nevada limited liability company, managed by Vivaventures Management Company, Inc., a Nevada corporation, a wholly owned subsidiary of Vivakor, Inc. (“VVMCI”). VV UTSI is authorized to issue 1,001,000 units, of which 1,000 Units are designated Class A Units, and 1,000,000 Units are designated Class B Units, subject to increase and/or designation of new classes pursuant to the authority of the Manager, as approved by a majority in interest of the holders of Class A Units. VVMCI is the holder of all 1,000 Class A Units. Class B Units have the same economic rights as the Class A Units, but Class B Units do not have voting rights, except as is required pursuant to the Nevada Revised Statutes. Capital accounts are maintained for the members and, subject to certain adjustment provisions VV UTSI’s LLC Agreement, net income, net loss and nonrecourse deductions attributable to operations of VV UTSI will be allocated among members in accordance with their percentage interests. VV UTSI cannot require members to make additional capital contributions. Except as may be provided in VV UTSI’s LLC agreement, no member may withdraw any portion of the capital of the VV UTSI, and no member will be entitled to the return of its contribution to the capital of the VV UTSI except upon dissolution of the VV UTSI in accordance with the dissolution provisions of VV UTSI’s LLC agreement. Subject to certain special allocation provisions of VV UTSI’s LLC agreement, all income, gains, losses, deductions and credits of VV UTSI will be allocated for federal, state and local income tax purposes in accordance with the allocations of net income and net loss, and cash will be distributed by the VV UTSI Manager in accordance with VV UTSI’s LLC agreement to the Members, including for payment of accrued taxes. Assignment or transfer of VV UTSI membership interests is prohibited, except as expressly permitted in VV UTSI’s LLC agreement, including in connection with estate planning. Rights of first refusal are available, first to VV UTSI, and then to VV UTSI’s other membership interests, in the event a VV UTSI member desires to sell VV UTSI Units.

VV RII is a Nevada limited liability company, managed by VVMCI. VV RII is authorized to issue 1,001,000 units, of which 1,000 Units are designated Class A Units, and 1,000,000 Units are designated Class B Units, subject to increase and/or designation of new classes pursuant to the authority of the Manager, as approved by a majority in interest of the holders of Class A Units. VVMCI is the holder of all 1,000 Class A Units. Class B Units have the same economic rights as the Class A Units, but Class B Units do not have voting rights, except as is required pursuant to the Nevada Revised Statutes.

Upon purchasing Class B Units, such VV RII member was issued a warrant to purchase shares of Vivakor common stock (the “VV RII Warrant”). The VV RII Warrant is exercisable at any time during the period beginning on the first anniversary of the date of purchase of the VV RII Class B Units until the date that is five years and six months from the date of purchase of the VV RII Class B Units. Upon exercise of the VV RII Warrant, such member will convert all of his remaining value of the revenue participation rights into Vivakor Common Stock, and such member would cancel all of his remaining VV RIII Class B Units. The purchase price of the VV RII Warrant shall be the original purchase price of the Class B Units adjusted for the number of years it was held by such member. The twenty-year term of the revenue participation right begins on the date an extraction machine funded by VV RII is placed into production. The amortization of member participation rights will be on a straight-line basis. Pursuant to the VV RII Warrant, the exercise price will be based on a discount to market for Vivakor Common Stock based on the following schedule: (i) less than two years after purchasing Class B Units, five (5%) percent discount to market; (ii) more than two years, but less than three years after purchasing Class B Units, ten (10%) percent discount to market; (iii) more than three years, but less than four years after purchasing Class B Units, fifteen (15%) percent discount to market; (iv) more than four years, but less than five years after purchasing Class B Units, twenty (20%) discount to market; and (v) more than five years after purchasing Class B Units, twenty-five (25%) percent discount to market.

Capital accounts are maintained for the members and, subject to certain adjustment provisions VV RII’s LLC Agreement, net income, net loss and nonrecourse deductions attributable to operations of VV RII will be allocated among members in accordance with their percentage interests. VV RII cannot require members to make additional capital contributions. Except as may be provided in VV RII’s LLC agreement, no member may withdraw any portion of the capital of the VV RII, and no member will be entitled to the return of its contribution to the capital of the VV RII except upon dissolution of the VV RII in accordance with the dissolution provisions of VV RII’s LLC agreement. Subject to certain special allocation provisions of VV RII’s LLC agreement, all income, gains, losses, deductions and credits of VV RII will be allocated for federal, state and local income tax purposes in accordance with the allocations of net income and net loss, and cash will be distributed by the VV RII Manager in accordance with VV RII’s LLC agreement to the Members, including for payment of accrued taxes. Assignment or transfer of VV RII membership interests is prohibited, except as expressly permitted in VV RII’s LLC agreement, including in connection with estate planning. Rights of first refusal are available, first to VV RII, and then to VV RII’s other membership interests, in the event a VV RII member desires to sell VV RII Units.

In 2018 we formed RPC Design and Manufacturing LLC (“RDM”) which assisted in the manufacture of our second RPC and will continue to assist in the manufacture of our RPCs going forward. A majority of the LLC units of RDM are owned by Vivaopportunity Fund LLC (“VOF”). VOF is an investment limited liability company that is a pass through entity to individual investors that have purchased Class B Units in this entity. VOF is allocated its portion of cash distributions, net income, and net loss based on its ownership percentage in RDM, which it then passes on to its investors. Holders of Class B Units of VOF have the right to exchange their Class B Units for our common stock following the 10 year anniversary of the date they purchased their Class B Units. The number of shares of our common stock to be issued upon exchange will be determined by the fair market value of the LLC units, and a 20% discount to market. RDM is considered a variable interest entity and is consolidated in our Consolidated Financial Statements.

VOF is a Utah limited liability company, managed by VVMCI. Members have the right to vote on the removal of the VOF Manager as provided in the operating agreement and admission of the Manager or election to continue the business of the Company after the Manager ceases to be the Manager when there is no remaining Manager. Capital accounts are maintained for the members and, subject to certain adjustment provisions VOF’s operating agreement, net income, net loss and nonrecourse deductions attributable to operations of VOF will be allocated among members in accordance with their percentage interests. VOF cannot require members to make additional capital contributions. Except as may be provided in VOF’s LLC agreement, no member may withdraw any portion of the capital of the VOF, and no member will be entitled to the return of its contribution to the capital of the VOF except upon dissolution of the VOF in accordance with the dissolution provisions of VOF’s LLC agreement. Subject to certain special allocation provisions of VOF’s LLC agreement, all income, gains, losses, deductions and credits of VOF will be allocated for federal, state and local income tax purposes in accordance with the allocations of net income and net loss, and cash will be distributed by the VOF Manager in accordance with VOF’s LLC agreement to the Members, including for payment of accrued taxes. Assignment or transfer of VOF membership interests is prohibited, except as expressly permitted in VOF’s LLC agreement, including in connection with estate planning. Rights of first refusal are available, first to VOF, and then to VOF’s other membership interests, in the event a VOF member desires to sell VOF Units.

On December 31, 2021, VOF Members will have the right to convert their Units into shares of common stock of Vivakor, at the price of the Units determined by the VOF Manager to be the fair market value based on the amount that the VOF Members would have received if VOF’s assets were sold on the Conversion Determination Date, all VOF liabilities paid and the remaining amount distributed to the VOF Members and Manager in accordance with the terms of the VOF Operating Agreement. Each VOF Member will have 30 days from receipt of the such conversion fair market value to provide written notice to VOF of the Member’s election to exercise the such conversion right. Within 15 days after the expiration of the 30-day period described above (the “Conversion Closing Date”), Members who delivered a conversion notice will have their Units converted into shares of Vivakor Common Stock. The number of shares of Vivakor Common Stock to be issued upon conversion of the Units will be based on the 30-day average share price of Vivakor’s Common Stock for the 30-day period immediately preceding the Conversion Closing Date, discounted by 10%. All conversions must comply with all state and federal securities laws and requirements. As of the day following the Conversion Closing Date, Vivakor will have the right to purchase any Units owned by Members who did not exercise their Conversion Right. Within 15 days of the Conversion Closing Date, Vivakor will provide the Members with written notice of its election to exercise the Call Option. The fair market value for the Units will be equal to the Conversion FMV. The purchase of Units to be acquired pursuant to the Call Option must be made within 30 days of the Conversion Closing Date (the “Call Option Closing Date”). At any time following 10 years after December 31, 2021, the Manager will have the right (the “Call Right”), in its sole discretion, to require all of the Members to sell their Units to a third-party purchaser pursuant to a sale, transfer, assignment, exchange or other disposition (a “Call Right Transfer”), which the Manager believes is in the best interest of VOF or to provide or increase certain tax benefits. If the Manager elects to exercise the Call Right, the Manager will send a written notice to each Member specifying the terms of the Call Right Transfer and the date on which the closing is anticipated to occur (the “Call Right Closing”), which date will not be earlier than 10 business days nor later than 60 business days from the date that such notice is delivered to the Members. At the Call Right Closing, upon payment of the purchase price to the Members, each Member will transfer and assign to the purchaser all of its Units free and clear of any encumbrances and execute and deliver any and all documentation reasonably required in order to effectuate the Call Right Transfer of the Units. Each of the Members must grant to the Manager a special power of attorney to take all action as may be necessary or appropriate to transfer or sell such Member’s Units in accordance with the terms of the Operating Agreement.

RDM and Vivakor are party to that certain Venture Agreement (the “Venture Agreement”), pursuant to which it is anticipated that RDM will contribute $7,000,000, the gross proceeds from the offering of equity interests (the “Venture Offering”) in the entity established pursuant to the Venture Agreement (the “Venture”), in exchange for ownership interest in the Venture based on the units of equipment funded by the Venture Offering and the divided by the total number of units of equipment being leased or financed for sale by the Venture, if the maximum Venture Offering amount is raised. The manager of the Venture will be Vivakor or one of its subsidiaries or affiliates as it shall designate in writing, and has the authority to manage and control all aspects of the business of the Venture. Cash from operations from the Venture will be distributed at 25% of gross revenue from the lease or sale of the unit of equipment funded by the Venture Offering and 75% to the Venture’s Manager. The Venture’s Manager and its Affiliates will be reimbursed for all reasonable expenses advanced by the Venture’s Manager or its Affiliates in connection with the Venture Offering and operation of the Venture’s business. A Venture member may not sell, mortgage, hypothecate or assign its membership interest without the prior written consent of the Venture’s Manager. The Venture Agreement may be amended or modified with the written consent of both the Manager of the Venture and RDM. To raise additional capital in the future to expand the Venture’s business and manufacture additional equipment, the Venture intends to issue and sell additional membership interests to other Qualified Opportunity Funds or other investors. In the event additional membership interests are sold to raise additional capital, the book value of the Venture’s assets will be adjusted to their fair market value, and the additional membership interests will be priced correspondingly. As a result, an investor’s ownership interest in the Venture will be diluted. In addition, it is possible that the future investors will become co-managers of the Venture and may have a right to co-manage the Venture.

In November 2020, the Company assisted in forming a special purpose entity, Viva Wealth Fund I, LLC (“VWFI”), for the purpose of manufacturing, leasing and selling custom equipment to the Company. Wealth Space, LLC, an unaffiliated entity, will manage VWFI and the Company will assist in the day-to-day operations. In November 2020, VWFI commenced a $25,000,000 private placement offering to sell convertible promissory notes, which convert to VWFI LLC units, to accredited investors to raise funds to manufacture equipment that will expand the Company’s second RPC. VWFI has contracted with RDM to assist it in its manufacturing needs for the Company. In the event that VWFI does not raise at least $6,250,000 by the offering termination date, then the convertible notes and/or units would convert into Vivakor common stock at the greater of $0.45 per share or a 10% discount to market. VWFI unit holders may also sell their units to the Company for their principal investment amount on the 3^rd, 4^th, and 5^th anniversary of the offering termination date. The Company has the option to use cash or common stock to purchase the LLC units if this option is exercised. If the Company chooses to pay in common stock, the number of shares the LLC unit holder will receive will be based on the price that is the greater of $0.45 per share or the 30-day average share price of the Company’s common stock (determined on the 30 days prior to the conversion determination date) discounted by 10%. The Company also has the option to purchase any LLC units where the members did not exercise their conversion option under the same terms and pricing. Any of the Company’s common stock received in any manner related to this offering will carry a trade restriction for a period of two years after the date of sale, in which the holder of the common stock will not, in any 90-day period, sell a greater number of shares than 10% of the 10-day average trading volume at the time of the proposed sale. If the Company undertakes an underwritten public offering of stock, each holder of this restriction will be required to comply with a six-month market stand-off agreement. VWFI has raised $710,000 since its inception in November 2020.

Going Concern

As of September 30, 2020, we had $231,020 of cash on hand and an accumulated deficit of $29,491,591. There is substantial doubt as to our ability to continue as a going concern based on the understanding that we do not have adequate working capital to finance our day-to-day operations for at least twelve months through December 2021. We will require additional funding to meet our obligations as they come due and to fund the development of our existing technologies. We may raise capital through loans from current stockholders, public or private equity or debt offerings, grants, or strategic arrangements with third parties, and we intend to and are in the process of seeking out possible international capital raising opportunities. There can be no assurance that additional capital will be available to us on favorable terms, or at all.

We believe that the successful completion of this offering will eliminate this doubt and enable us to continue as a going concern; however, if we are unable to raise sufficient capital in this offering, we may need to obtain alternative financing or significantly modify our operational plans in order to continue operations. We currently have no agreements, arrangements, or understandings with any person to obtain additional funds through bank loans, lines of credit or any other sources. If we are not able to obtain the additional financing on a timely basis, we may be required to further scale down or perhaps even cease the operation of our business. The issuance of additional equity securities could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. Our financial statements do not include adjustments that might result from the outcome of this uncertainty.

We have no material commitments or contractual purchase obligations for the next twelve months.

COVID-19

On March 11, 2020, the World Health Organization (“WHO”) declared the COVID-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease.

COVID-19 and the U.S. response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have in the long-term, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations.

Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. Material changes in our Statement of Operations for the nine months ended September 30, 2020 and 2019, and the years ended December 31, 2019 and 2018 are discussed below.

Revenue

For the nine months ended September 30, 2020 and 2019 we realized revenues of $1,416,051 and none, respectively. We realized precious metal sales from our business plan of buying and selling precious metal commodities on the open market of $1,372,321 for the nine months ended September 30, 2020, such precious metals having been acquired for immediate resale, with the Company acting as intermediary and never keeping an inventory of precious metals. We also realized revenues, net of a refining allowance, of $37,730 for the sale of our precious metal concentrate produced from our own precious metal extraction operations. We also received a payment of $6,000 pursuant to our Kuwait contract for remediation services as described above. For the nine months ended September 30, 2019 we had not yet implemented our business plan to buy and sell precious metals on the open market and as such there were no precious metal sales during this period.

For the years ended December 31, 2019 and 2018, we realized revenues of $0 and $10,179 from the sale of crude oil from the test production from our first RPC unit in Vernal, Utah. The decline in sales from 2018 to 2019 is due to our first RPC unit being taken offline in May 2018 to be shipped to Kuwait for remediation services. The unit did not operate in Kuwait during 2019 due to shipping and international clearance delays, including delays with the vendors and infrastructure clearances at the site where the machine was to commence remediation operations.

Cost of Revenue

Our cost of revenues consisted primarily of costs associated with selling our precious metals on the open market and precious metal commodity broker fees.

Our costs of revenue increased from none for the nine months ended September 30, 2019 to $1,323,378 for the nine months ended September 30, 2020. The increase in the cost of revenue directly relates to costs associated with selling our precious metals on the open market and precious metal commodity broker fees.

Our costs of revenue decreased from $3,550 for the year December 31, 2018 to $0 for the year ended December 31, 2019. Cost of revenue for the year ended December 31, 2018 consisted of operating and selling expenses associated with the sale of crude oil from the test production from our first RPC unit in Vernal, Utah. The decrease in our cost of revenue from 2018 to 2019 is due to our first RPC being taken offline in May 2018 to be shipped to Kuwait for remediation services. The unit did not operate in Kuwait during 2019 due to shipping and international clearance delays, including delays with the vendors and infrastructure clearances at the site where the machine was to commence remediation operations.

Gross Profit and Gross Margin

For the nine months ended September 30, 2020 and 2019 we realized gross profit of $92,673 and $0, respectively. The gross profit increased in proportion to the revenue and costs of revenue related to the purchase and sale of precious metals as described above.

For the years ended December 31, 2019 and 2018 we realized gross profit of $0 and $6,629. The gross profit decreased in proportion to the revenue and costs of revenue as described above.

Our gross margin will continue to be affected by a variety of factors that include the market prices of precious metals, the volume hydrocarbons produced by our RPC units, the number of RPC units placed into production, and our ability to raise capital to continue to fund our operations and RPC unit manufacturing.

Operating Expenses

Our operating expenses consist primarily of marketing, general and administrative expenses, bad debt expense, and amortization and depreciation expense. Marketing expenses include marketing fees of company representatives for marketing the business and is products and services as well as investor customer service. General and administrative expenses include professional services 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. 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.

Overall operating expenses increased by $709,909, or 36.25%, from the nine months ended September 30, 2019 to the nine months ended September 30, 2020. Our operating expenses increased in 2020 due to the fact that we were no longer receiving any contribution to our expenses from VV USTI under the terms of our Working Interest Agreement as we did in the prior period.

Overall operating expenses increased by $422,834, or 22.49%, from the year ended December 31, 2018 to the year ended December 31, 2019. Our operating expenses increased in 2019 due to the fact that we were no longer receiving any contribution to our expenses from VV USTI under the terms of our Working Interest Agreement as we did in the prior period.

Loss from Operations

Our loss from operations increased from a loss of $1,958,135 for the nine months ended September 30, 2019 to a loss of $2,575,371 for the nine months ended September 30, 2020, an increase in loss of $617,236, or 31.52%. The increase in loss is attributed to the increase in operating expenses discussed above.

Interest income and expense

Interest income was $54,660 for the nine months ended September 30, 2019 and of $34,101 for the nine months ended September 30, 2020, a decrease of $20,559, or 37.61%. The decrease in interest income is mainly attributed to the conversion of the Odyssey note as described below.

Interest income was $83,219 for the year ended December 31, 2018 compared to interest income of $73,761 for the year ended December 31, 2019, a decrease of $9,458, or 11.4%. The decrease in interest income is mainly attributable to our conversion of the Odyssey note as described below.

Interest expense was $4,490 for the nine months ended September 30, 2019 and $43,303 for the nine months ended September 30, 2020, an increase of $38,813, or 864.43%. The increase in interest expense is mainly attributable to our entering into loans and notes payable to cover operating expenses during the COVID-19 pandemic, which temporarily suspended our operations in Utah and continues to suspend our operations in Kuwait.

Interest expense was $395,311 for the year ended December 31, 2018 compared to interest expense of $9,288 for the year ended December 31, 2019, a decrease of $386,023, or 97.65%. The decrease in interest expense is mainly attributable to our settlement of approximately $686,350 of notes payable in exchange for 209,414 shares of our common stock and paying down our interest-bearing notes payable in the amount of $632,852.

Gain (loss) on extinguished debt

For the nine months ended September 30, 2019, we recorded a gain on extinguishment of debt in the amount of $607,536. In March 2019 we settled outstanding debt with an aggregate principal and accrued interest balance of $632,850 in exchange for 2,531,400 shares of Odyssey common stock that we owned, and which were accounted for on a cost basis of approximately $25,000.

For the year ended December 31, 2019, we recorded a gain on extinguishment of debt in the amount of $607,536. In March 2019 we settled outstanding debt with an aggregate principal and accrued interest balance of $632,850 in exchange for 2,531,400 shares of Odyssey common stock that we owned, and which were accounted for on a cost basis of approximately $25,000.

For the year ended December 31, 2018 we recorded a loss on the extinguishment of debt in the amount of $126,000. In 2018, we settled the debt with an investor, which included the remaining amount of the debt discount attributed to the debt of $126,000.

Unrealized gain (loss) on marketable securities

For the nine months ended September 30, 2020, we recorded an unrealized gain on marketable securities in the amount of $345,915. We hold an equity investment in the common stock of Odyssey Group International, Inc. (Ticker: ODYY, OTC Markets), which was accounted for at cost minus impairment for the nine months ended September 30, 2019 due to the securities not being traded in an active market. In January 2020, the 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 the unrealized gain of $$345,915 for the nine months ended September 30, 2020.

Loss on conversion of note receivable

For the nine months ended September 30, 2020, we recorded a loss on a conversion of note receivable in the amount of $121,428. In September 2020 we converted $809,578 of our note receivable with Odyssey into 809,578 shares of Odyssey common stock pursuant to the terms of the note at $1.00 per share. On the date of the conversion, the Odyssey price per share on OTC Markets was $0.85 per share, which resulted in a $121,428 loss on the disposition of the note receivable.

Benefit or provision for income tax

The Company recorded income tax benefit of $102,492 for nine months ended September 30, 2020, respectively. The Company is projecting a 6.14% effective tax rate for the year ending December 31, 2020, which is primarily the result of projected benefit from book losses offset by a valuation allowance increase on the projected net operating losses incurred for the year.

The Company recorded income tax provision of $589,203 for the year ended December 31, 2019, respectively. The Company recorded an income tax benefit of $36,645 for the year ended December 31, 2018, respectively. The Company’s effective tax rate for 2019 and 2018 was (36.0%) and 1.67%, which was the result of the benefit of book losses offset by an additional valuation allowance on the net operating losses.

Cash flows

The following table sets forth the primary sources and uses of cash and cash equivalents for the nine months ended September 30, 2020 and 2019 as presented below:

	September 30,			September 30,
	2020			2019
Net cash used in operating activities	$	(722,194	)	$	(873,585	)
Net cash used in investing activities		(1,141,873	)		(694,870	)
Net cash provided by financing activities		1,490,184			1,604,338

Liquidity and Capital Resources

We have historically suffered net losses and cumulative negative cash flows from operations and, as of September 30, 2020, we had an accumulated deficit of approximately $29 million.

As of September 30, 2020 and 2019, we had cash and cash equivalents of $231,020 and $952,363, respectively. As of December 31, 2019 and 2018, we had cash and cash equivalents of $604,903 and $916,480, respectively.

To date we have financed our operations primarily through debt financing, private equity offerings and our working interest agreements.

For the nine months ended September 30, 2020 and 2019, our net cash used in operating activities was mainly comprised of net effect of the consolidated net loss of $2,262,249 and $1,564,274, our depreciation and amortization of $1,201,368 and $1,112,195, and an increase in accounts payable of $555,408 and $200,718 related to the building of our second RPC. For the nine months ended September 2020 we also realized a loss of $121,428 on a conversion of a note receivable and an unrealized gain on marketable securities of $345,915 as described above. For the nine months ended September 30, 2019 material transactions include a gain on extinguished debt of $607,536 and an increase in deferred tax liabilities related to our benefit or provision for income taxes as described above. For the nine months ended September 30, 2019 we also increased other assets by $269,367, which was mainly attributed to our payment of $200,000 for the exclusive right to purchase certain real property commonly known as Asphalt Ridge.

For the nine months ended September 30, 2020 and 2019, our net cash used in investing activities was mainly attributed to our purchase of equipment of $1,115,722 and $641,926 related to the manufacturing of our RPCs.

For the nine months ended September 30, 2020 and 2019, our net cash provided by our financing activities was mainly attributed to the net effect of the following events: For the nine months ended September 30, 2020 and 2019, we issued $624,907 and $290,000 noncontrolling units of RDM, we received proceeds of none and $2,677,688 from our working interest agreements with VV UTSI and VV RII, made payments on our working interest agreements with VVUYSI and RII of $116,535 and $1,481,867, and we also received proceeds of $944,673 and $34,517 related to the issuance of convertible bridge notes and other loans. For the nine months ended September 30, 2020, as included in the proceeds above, we obtained a Paycheck Protection Program loan for $295,745 that may be forgiven under the CARES Act, if we can demonstrate that the proceeds from the loan were used for eligible expenses. We also obtained a loan from the Small Business Administration in the amount of $299,900 in May 2020, as included in the proceeds above. For the nine months ended September 30, 2019, investors exercised stock warrants in the amount of $84,000.

Capitalized interest on construction in process was $1,136,424 for the nine months ended September 30, 2020 and $730,251 for the nine months ended September 30, 2019. There are no further existing firm obligations to make payments in connection with our construction in process; however, construction for each Nanosponge costs approximately $200,000, and we intend to manufacture for and add a Nanosponge to our current and any future RPCs.

For the years ended December 31, 2019 and 2018, we received proceeds in the amount of $2,418,142 and $3,206,372, respectively, from our working interest agreements with VV UTSI and VV RII, of which approximately $480,000 and $640,000 were allocated to participation right purchases, and the remainder attributed to working interest payables. For the years ended December 31, 2019 and 2018 we also issued convertible debt in the amount of $89,960 and $737,034, respectively. For the years ended December 31, 2019 and 2018, investors also exercised stock warrants in the amount of $91,982 and $51,999, respectively.

Our ability to continue to access capital could be affected adversely by various factors, including general market and other economic conditions, interest rates, the perception of our potential future earnings and cash distributions, any unwillingness on the part of lenders to make loans to us and any deterioration in the financial position of lenders that might make them unable to meet their obligations to us. If we cannot raise capital through public or private debt financings, equity offerings, or other means, our ability to grow our business may be negatively affected. In such case, we may need to suspend machine construction or further acquisitions until market conditions improve.

Contractual Obligations

Our contractual obligations as of December 31, 2019 are for operating lease liabilities for office and warehouse space. Operating lease obligations as of December 31, 2019 are as follows:

2020	$	323,515
2021	$	276,699
2022	$	287,769
2023	$	299,466
2024	$	231,174
Total	$	1,418,623

Interest Rate and Market Risk

Our financing arrangements are not subject to variable interest rates of the prime rate or LIBOR.

Inflation

Inflation generally will cause suppliers to increase their rates. In connection with such rate increases, we may or may not be able to increase our pricing to consumers. Inflation could cause both our investment and cost of revenue to increase, thereby lowering our return on investment and depressing our gross margins.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies & Use of Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements included in this Annual Report on Form 10-K, which have been prepared in accordance with GAAP. For further information on the critical accounting policies see Note 3 of the Notes to the Consolidated Financial Statements. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. Estimates by their nature are based on judgments and available information. Our estimates are made based upon historical factors, current circumstances and the experience and judgment of management. Assumptions and estimates are evaluated on an ongoing basis, and we may employ outside experts to assist in evaluations. Therefore, actual results could materially differ from those estimates under different assumptions and conditions. We believe our critical accounting estimates relate to the following: Recoverability of current and noncurrent assets, revenue recognition, stock-based compensation, income taxes, effective interest rates related to long-term debt, marketable securities, lease assets and liabilities, equity method investments, valuation of stock used to acquire assets, and derivatives.

BUSINESS

We are focused on the remediation of contaminated soil and water resulting from either man-made spills or naturally occurring deposits of oil. Our primary focus has been the remediation of oil spills resulting from the Iraqi invasion of Kuwait and naturally occurring oil sands deposits in the Uinta basin located in Eastern Utah. We plan to expand into other markets, both in Utah and globally, where we believe our technology and services will provide a distinct competitive advantage over our competition.

Our current focus is on the clean-up of greater than 7% hydrocarbon contaminated soil located in Kuwait as a result of the Iraqi invasion, and naturally occurring oil sands deposits in Utah. We have deployed two RPC units to date including one unit to Kuwait (for which operations have been temporarily suspended due to COVID-19) and another to Vernal, Utah (which is presently operating). We expect to deploy two additional RCPs to Vernal, Utah with the proceeds from this offering and believe that there may be an opportunity to deploy additional RPCs in Utah as well as to Kuwait and the Middle East.

Our Technologies

We own and/or license a number of technologies that allow us to effectively operate our remediation and recovery business along with other technologies that provide synergies with our core business. The description of these various technologies follows.

Hydrocarbon Extraction Technology

In 2015, we acquired and improved technology aimed at remediating contaminated soil and recovering usable hydrocarbons, which we refer to as RPCs. We presently have three patent applications pending related to our RPCs. Our RPCs each have the potential to clean a minimum of 20 tons of contaminated material per hour, depending on the oil contamination percentage in the processed material. Each RPC has the capacity to extract on a 24-hour operation 500 tons or more of contaminated material per day. The amount of extracted hydrocarbon recovered depends on the extent to which the material is contaminated. For example, we estimate that for every 480 tons of contaminated material processed per day that contains at least 10% oil, we will recover approximately 250 barrels of extracted hydrocarbons. The above example has been calculated as follows: contaminated material that is 10% oil is comprised of 200 pounds of oil per ton; one gallon of oil weighs 8.44 pounds, resulting in 23.69 gallons of oil per ton of contaminated material (200/8.44); there are 42 gallons per barrel, resulting in 0.56 barrels of oil per ton of contaminated material (23.69/42); 20 tons of contaminated material can typically be processed per hour, resulting in 11.2 barrels of oil per hour (0.56*20); and operations continue 24 hours per day, resulting in 268.8 barrels per day (11.2*24).

We believe our RPCs are significantly more advanced than other oil remediation technologies or offerings presently available on the market. Our RPCs have successfully cleaned contaminated soil containing greater than 7% hydrocarbon content, while, to our knowledge, our competitors are limited to projects containing less than 5% hydrocarbon contamination. We believe our ability to clean soil with higher percentages of hydrocarbon contamination is a distinctive advantage that will allow us to operate on a global basis in any location that has suffered from oil spills or naturally occurring oil sands deposits. While our primary focus and mandate will be on the manufacture and deployment of our RPCs, we intend to continue to develop, acquire or license additional clean energy technologies and environmental solutions that will directly enhance and expand our current technologies and service offerings.

We have designed our RPCs to provide an environmentally friendly solution to the remediation of hydrocarbon-contaminated soil, as they do not utilize water. Our RPCs operate by loading contaminated soil onto a feeder and conveyor system that effectively delivers the material prepares the material into a fully contained, closed-loop system. Physical separation of the hydrocarbons from the contaminated soil does not utilize water or steam and is instead accomplished using a proprietary extraction fluid to dissolve the hydrocarbon components.

In the first stage of the process, hydrocarbon contaminated soil is mixed with our proprietary solvent which forms a slurry of sand, hydrocarbon and extraction fluid. This slurry moves from the mixing chamber into a separation chamber where the sand is separated from the hydrocarbon/extraction fluid mix by gravity. The soil is then dried and transported via a conveyer to a lined pit where extensive testing is performed to ensure the hydrocarbons have been properly removed. Meanwhile, the extracted hydrocarbon and solvent travels to a separate chamber where the hydrocarbons are separated from the extraction solvent. The solvent is then reclaimed.

Our RPCs are manufactured in Salt Lake City, Utah. In the future, we expect to finance our RPCs through special purpose vehicles pursuant to 20-year sale/leaseback arrangements. In each instance, the special purpose vehicle will finance the RPC through third party investors, and we will act as the manager of such special purpose vehicle and hold a 1% ownership interest. Management believes that utilizing this structure provides significant benefits to our shareholders, as these financings are less dilutive in nature.

Our next group of three RPCs are anticipated to be financed by Viva Energy Fund III, LLC through a 20-year lease arrangement. It is expected that Viva Energy Fund III, LLC will finance the RPC through third-party investors and has engaged Axxcess Capital Partners, LLC, an investment bank active in the oil, gas and alternative energy industries, to assist Viva Energy Fund III, LLC in identifying investors to finance the construction of these RPCs. We are looking to raise an aggregate of up to $100 million for the financing of additional RPCs, with an initial $25 million to be raised over the next 12 to 16 months. Under this arrangement, we will be the sole manager of Viva Energy Fund III, LLC and we will hold a 1% ownership interest in Viva Energy Fund III, LLC. Proceeds from this offering will not be used to finance these three RPCs.

Wastewater Management System

In April 2020, we entered into a project charter agreement with solvAQUA, a Canadian-based clean water technology company, pursuant to which we may purchase certain wastewater removal equipment from solvAQUA. The solvAQUA WMS is a compact solution that continually processes and separates large volumes of wastewater (4,000+ m3/day for each WMS) with an ability to scale to remove any volume of oil, grease and suspended solids from wastewater, in most cases removing 99.99% of waste. The processed water stream can in some cases be discharged or reused without further treatment. We have placed our first order with solvAQUA for WMS equipment and anticipate receipt and installation of the equipment prior to December 31, 2020, with operations to commence shortly thereafter. On July 15, 2020, solvAQUA granted us an exclusive license to either incorporate solvAQUA’s technology platform into our RPCs or to use independently. This will allow us to service remediation projects that have a combination of wet and dry opportunities. The exclusive license has an initial term of one year, which may be extended to five years upon our successful installation and deployment of the first two WMSs.

We believe that the combination of being able to remediate both dry and wet locations could more than double our market opportunity in the future, given the prevalence of remediation locations where oil is mixed with water. Although wastewater remediation is not required for any of our current projects, we believe that this capability will prove valuable to us in the future.

Automation and Machine Learning

The RPC systems we build are automated and controlled by software enabling us to maximize efficiencies. We believe that these automations may ultimately allow us to operate the RPCs twenty-four hours a day, resulting in continuous feed capabilities that will allow us to manage our systems remotely world-wide. Each RPC unit is designed with a focus on automation to achieve our Key Performance Indicators (KPIs). We have deployed data analytics and machine learning, to enable operations to be predictive, reduce risk, improve safety, and reduce costs.

Metallic Separation Technology

In 2015, we obtained two metal extraction systems and a perpetual license to use the proprietary technology and machinery for extracting precious metals from sand-based ore materials for $7.6 million from Vivaventures Precious Metals, LLC (“VV Precious Metals”), pursuant to our loan outstanding to VV Precious Metals being extinguished. We also received a 75% ownership interest in the concentrated unrefined flakes of precious metals and rare earth minerals that had already been recovered from soils by VV Precious Metals through a royalty agreement. We divested our 39% interest in VV Precious Metals in July 2020. Such divestiture has had a de minimis impact on our business.

We market and sell the precious metals we extract from contaminated soil. As we continue our efforts, we anticipate increased opportunities to monetize our precious metals end product. We believe that we may be able to generate proceeds of approximately $6 million from the sale of precious metals, based on indications from potential buyers.

Hydrocarbon Upgrading Technologies

We have acquired and/or licensed two separate technologies described below that will enable us to upgrade the hydrocarbons recovered from our remediation process. These processes have been proven in laboratory tests, but we have not yet performed this upgrading in a commercial setting.

We entered into a letter of intent with B Green, Inc. (“B Green”) in February 2020 providing us with certain rights to use on a trial basis cavitation technology from B Green, Inc. Subsequently, on September 30, 2020, we entered into an Intellectual Property License Agreement with B Green (“B Green License Agreement”), pursuant to which we have been granted a worldwide, exclusive, non-transferable license to the intellectual property embodied in B Green’s cavitation technology to develop, manufacture, have manufactured, use market, import, have imported, offer for sale and sell cavitation devices built from the licensed intellectual property. The B Green License Agreement also grants us the first right of refusal to purchase all devices and all intellectual property associated with the cavitation technology. The B Green License Agreement extends for the lifetime of the Intellectual Property. We will be required to make an initial payment of $5,000 after delivery of the first simple cavitation device, and thereafter we will be obligated to pay $3,000 in monthly services fees and 50% of the net profits. Additionally, under the terms of the B Green License Agreement, at such time as we successfully improve and manufacture a cavitation device with a processing rate equal to, or greater than, 30 barrels per hour, we will be required to issue 1,000,000 shares of our common stock to B Green. Third party, independent testing conducted by the University of Utah has shown that this proprietary technology increases the API gravity of hydrocarbons by elongating the hydrocarbon chains without cutting or cracking these chains. API gravity is the measure of how heavy or light petroleum liquid is compared to water and is used in the industry as the standard measure for viscosity. The API of the recovered crude is increased, allowing such crude to have additional uses and usually at higher unit prices.

In addition, in 2017, we acquired from CSS Nanotech an exclusive right to use their nano-sponge technology, which essentially serves as a micro-upgrader, transforming hydrocarbon product into a more useful product, such as petroleum or gasoline, as an addition to our hydrocarbon extraction technology. The inventor of this technology subsequently joined us as our Chief Scientific Officer. This patented technology allows for hydrocarbon material to be absorbed by a specialized sponge. Low energy microwaves are then introduced into the process and the sponge, which is made of a highly thermally conductive material, absorbs this energy causing an instant thermal effect, which essentially refines the crude by cutting or cracking the carbon chains. We intend to add this system to our process of upgrading the heavy crude recovered by our RPCs.

We believe that each of these technologies has the ability to upgrade the heavy crude that is recovered from our recovery and remediation process based on our needs and demand, and we intend to fully integrate these technologies into our process. For example, if there is a high demand for fuels we would process the extracted crude through the nano-sponge technology to refine and upgrade the product into diesel fuel. If the demand is instead for certain types of asphaltic cement, where the heavy crude is not refined but processed, we would utilize the CHU technology.

Market Opportunity

In addition, we believe that the heavy crude that we have been recovering in Utah is ideal for producing asphaltic cement. The demand for asphaltic cement in the United States is presently estimated to be $93 billion this year according to Transparency Market Research. We have provided our material to asphalt companies for testing to determine what modifications, if any, would be needed to be meet their specifications. Provided we are able to produce asphaltic cement that meets our customers’ specifications, we believe that we will be able to offer our product at very competitive prices and in an environmentally friendly manner.

Revenue

We presently have two projects utilizing our first two manufactured RPCs - our project in Kuwait (which has been temporarily suspended due to COVID-19) and our project in Vernal, Utah (which is currently operating).

In Kuwait, where we do not have ownership of the recovered oil, we generate revenues by charging per cubic meter of soil remediated. For our current project we generate revenues of $72 per cubic meter of contaminated material processed.

Our RPC situated in Vernal, Utah has the capacity to process 500 tons or more of naturally occurring oil sands deposits per day. We estimate that if the extracted material is composed of at least 10% oil, we will recover approximately 250 barrels of extracted hydrocarbons each day, which could then be sold for energy or converted to asphaltic cement and sold for use in roads at higher prices.

We also market and sell the precious metals we extract from our remediated and waste soils. As we continue our efforts, we anticipate increased opportunities to monetize our precious metals end product. We believe that we may be able to generate proceeds of approximately $6 million from the sale of precious metals, based on indications from potential buyers.

Kuwait Project

The United Nations (UN) had allocated up to $14.7 billion for post-Iraq war reparations in order to clean up Kuwait. Kuwait suffered extensive contamination as a result of the 1991 Persian Gulf War. At the close of the Gulf War, Saddam Hussein ordered Kuwaiti oil wells to be blown up, resulting in the destruction of approximately 600 oil wells. The damage resulting from such fires, which burned for seven months, included a layer of hardened “tarcrete,” caused by the sand and gravel on the land's surface combining with oil and soot, forming over almost 5% of the country's area.

We were engaged as a subcontractor by the KOC for two hydrocarbon remediation projects in the country in January 2018 and July 2019: the Sustainable Economic Environmental Development Project (“SEED”) project and the Kuwait Environmental Remediation Program (“KERP”) project. Both projects are managed by the Soils Remediation team at KOC. Both projects have a range of contaminated soils to be remediated.

Our technology has been successful in reducing the amount of contaminated material in the SEED project from 20% hydrocarbon contamination to just 0.2% hydrocarbon contamination, based on third party independent testing performed by ALS Arabia in March 2020. We believe we possess the only technology that has been successful at remediating such highly contaminated soil (defined as anything above 20% hydrocarbon contamination), while also returning usable hydrocarbons. KOC has advised us that we are the only company to have submitted third-party testing results regarding our technology that has met KOC’s specifications for remediating oil sands in excess of 7% hydrocarbons. For this reason, we believe that our technology will be selected for future KOC projects to clean contaminated soils containing in excess of 7% hydrocarbons. Our initial contract for the SEED projects was to clean 14,000 metric tons of contaminated soil and is expected to significantly grow in size and scope. The project pays us, based on the specific characteristics of the soil, a flat fee of $70 to $100 per ton of contaminated soil we clean. We then return the remediated soil and the recovered oil to the Kuwaiti government. Accordingly, for this project, the Company does not have any short-term risk relating to volatile oil prices.

The KERP project is anticipated to involve approximately 26 million cubic meters of contaminated oil sands requiring remediation. We expect that as much as 20% of the contaminated soil will contain more than 5% hydrocarbon contamination. We also believe that we will have the opportunity to act as a technology provider to the main KERP project contractors on other projects requiring remediation of sands exhibiting greater than 7% contamination, which we believe could have a market potential of up to $500 million for us.

The oil recovered from these projects in Kuwait is considered a sovereign asset, so the ability to reclaim this asset also creates a social value for the country. In order to remediate all of the contaminated sand exhibiting greater than 7% contamination in the timeframe required by the UN, the Company expects to expand its contract and deploy 10 RPC units to Kuwait over the next several years.

Other International Projects

In addition to managing the projects in Kuwait, the UN is overseeing the funds allocated to the remediation and clean-up of the Ogoni Lands in Africa, which is estimated to contain millions of tons of both contaminated soil and water and has allocated significant funding for its cleanup. Taking into consideration this particular environmental disaster, plus other global oil contamination projects involving oversight by the UN, together with our successful performance on the UN-managed SEED Project in Kuwait, we believe we will be a contender for significant additional contracts.

Vernal, Utah Project

The State of Utah has, according to the U.S. Geological Survey, approximately 14 billion barrels of measured oil in place with an additional estimated 23 to 28 billion barrels of oil contained in contaminated oil sands that are deposited near the ground surface. We believe that the crude from these oil sands can be turned into asphaltic cement for making roads, or upgraded for polymers or fuel. In 2019, we acquired an option to acquire surface rights and the approvals to operate on an oil sands parcel of land located in Vernal, Utah. Upon entering into the option agreement, we paid an initial fee of $200,000 and we later exercised the right to extend the expiration date of the option without any additional required payments. The option currently provides us with the right to acquire this property, prior to January 31, 2021, for a total purchase price of $17.5 million. Vernal is the county seat, and largest city in Uintah County, located in northeastern Utah, approximately 175 miles east of Salt Lake City, and 20 miles west of the Colorado border.

The Vernal property contains approximately 300 million cubic yards of oil sand material available for processing. The property is located on approximately 600 acres. If acquired, we believe that we could ultimately recover as much as 40 million barrels of oil from this property if we are able to economically scale our operations. Each upgraded RPC unit, such as the RPC unit in Vernal, Utah, has the ability to process, at a minimum, 20 tons of contaminated material per hour depending on the oil contamination percentage in the processed material. We believe, based on the number of estimated barrels of oil contained in oil sands deposits located on SITLA property, that there may be an opportunity to deploy as many as 100 RPCs to properties containing oil sands deposits owned by the State of Utah.

Material extracted from our Vernal, Utah project can be sold for energy or converted into asphaltic cement, which we believe is less affected by daily changes in oil prices. With our one RPC unit, assuming full utilization, we anticipate producing approximately 50 tons of asphaltic cement per day. We anticipate that we will be able to sell our asphaltic cement for, referencing present pricing, approximately $50 per ton.

Competitive Strengths and Growth Strategy

We are focused on the remediation of contaminated soil and water resulting from either man-made spills or naturally occurring deposits of oil. Our primary focus has been the remediation of oil spills resulting from the Iraqi invasion of Kuwait and naturally occurring oil sands deposits in the Uinta basin located in Eastern Utah. We plan to expand into other markets, both in Utah and globally, where we believe our technology and services will provide a distinct competitive advantage over our competition.

Competitive Strengths

We believe the following strengths provide us with a distinct competitive advantage and will enable us to effectively compete on a global basis:

Proprietary patent-pending technology;

Environmental advantages;

Strong relationships with customers and regulatory agencies; and

Experienced and highly-skilled management, Board of Directors and Advisory Board.

Proprietary Patent-Pending Technology

In total, we, together with our subsidiaries, have intellectual property that is in the form of both proprietary knowledge and patents. Our patent portfolio consists of two issued U.S. patents, two pending U.S. patent applications, one pending international patent application filed through the Paris Cooperation Treaty (PCT), and one pending patent application in Kuwait. In addition, we have licensed from our partners the right to use additional patented technologies.

We presently have three patent applications pending related to our RPCs and two issued patents related to our other remediation technologies.

We believe, based on direct and ongoing conversations with our customers and third-party independent test results, that our technology is the only commercially available technology that can not only clean soil that contains greater than 7% hydrocarbon, but also preserves the hydrocarbons extracted from such soil for future use. We believe that this provides us with a true competitive advantage.

Our main technology has been tested and validated for all of its claims by multiple separate independent expert firms both in the United States and the Middle East, whose reports confirm that we have reclamation technology, which has been tested and reviewed, that possesses the ability to clean soil with more than 7% hydrocarbon contamination and still leave the recovered hydrocarbons in a usable state.

We are also expanding our remediation services and offerings to include the solvAQUA technology, which will enable us to remove hydrocarbons from water (as opposed to soil), while preserving the hydrocarbons for future usage. We expect delivery of our first solvAQUA WMS machine by the end of the calendar year, with operations to commence shortly thereafter. The solvAQUA WMS machines can operate either in conjunction with, or independently of, the RPCs.

Environmental Advantages

Among our key corporate objectives is to be at the forefront of social responsibility for its technological impact. We strive for all of our systems to ultimately become closed loop systems, to minimize adverse impacts on air quality and reduce the need for use of clean water. Our ability to turn waste into value is in line with this core objective. Our remediation projects in Kuwait are expected to reduce emissions from vaporization of the oil spilled in the soil. The ability to clean produced water from oil production can eliminate the need for evaporation ponds, improving air quality and saving on the use of clean water.

We believe our technology and service offerings will position us well to conduct our business in any geographical region in which soil or water has been contaminated by hydrocarbons.

Strong Relationships with Customers and Regulatory Agencies

We have developed close relationships with customers and government agencies, including SITLA and the KOC. We anticipate receiving access to additional oil sands deposits located in Utah from SITLA, based on our existing relationship with SITLA and our conversations with them. We also anticipate receiving additional contracts from KOC to remediate contaminated properties in Kuwait, based on our existing relationship with KOC and conversations with them.

Experienced and Highly Skilled Management, Board of Directors and Advisory Board

Our Board of Directors is comprised of accomplished professionals who bring decades of experience to the Company. Our Board of Directors includes a director who has served as a member of the Executive Committee of one of the largest global accounting firms and has served on the Board of Directors of two multi-billion dollar publicly traded companies, a former director of technology investment banking at Goldman Sachs, a successful investor and entrepreneur who has founded and provided initial financing for numerous life science companies, several of which have grown to multi-billion dollar publicly traded companies, and the mayor of a city in Utah.

In addition, we have an Advisory Board comprised of former senior members of oil and gas companies, both in the United States and in the Middle East. Our Advisory Board is led by one member who is an accomplished business professional and a member of a royal family based in the Middle East and another member who is an experienced health and safety expert operating in the oil and gas industries.

Growth Strategies

We will strive to grow our business by pursuing the following strategies:

Expansion of our oil recovery projects in Utah;

Expansion of our remediation projects in Kuwait;

Expansion into new and complementary markets;

Increase of revenue via new service and product offerings;

Strategic acquisitions and licenses targeting complementary technologies; and

Redeployment of the metallic separation technologies.

Expansion of our Oil Recovery Projects in Utah

The State of Utah has, according to the U.S. Geological Survey, approximately 14 billion barrels of measured oil in place with an additional estimated 23 to 28 billion barrels of oil contained in contaminated oil sands that are deposited near the ground surface. The majority of these oil sands deposits are located on land owned by SITLA. While our current project in Vernal, Utah is not located on SITLA land and we do not yet have a definitive agreement, SITLA has expressed an interest in providing us leased access to these lands in exchange for a royalty to be paid by us in an amount equal to 8% of all revenue generated from any hydrocarbon-based products produced by us from hydrocarbons extracted from these lands. All royalty payments to SITLA would result in direct funding to the State’s school system. We believe, based on the number of estimated barrels of oil contained in oil sands deposits located on SITLA property, that there may be an opportunity to deploy as many as 100 RPCs to oil sands deposits located on land owned by the State of Utah. We will seek to acquire additional properties and mineral rights in the vicinity of Vernal, Utah from individual land owners and the State of Utah with a goal of increasing our hydrocarbon holdings to as much as one billion barrels of contingent resources containing a minimum of 10% hydrocarbon saturation.

Expansion of our Remediation Projects in Kuwait

Our RPC technology was successfully used in our initial project for KOC in Kuwait, where we removed hydrocarbons from soil with more than 7% contamination and, following the process, the hydrocarbon contamination level of the soil was reduced to less than 0.5%, which was lower than the level needed to meet the project specifications. There is still approximately 26 million cubic meters of soil contaminated by oil from the Iraqi invasion of Kuwait. Under our current contract, we will charge $72 per cubic meter of soil remediated. We are currently working with KOC and other government-controlled entities to expand our remediation projects in Kuwait. We are in active negotiations to provide the technology and operations as a subcontractor to large, multinational remediation companies within the region where our technology could be used on all of the sands with contamination levels greater than 7%. Other technologies may also be used for the less contaminated soils.

Expansion into New and Complementary Markets

We intend to explore expansion opportunities on a global basis, including in places with extreme contamination such as the Ogoni Lands region of Nigeria, oil spill lakes located in Saudi Arabia and Turkmenistan, and naturally occurring oil sands deposits in Kazakhstan, where we believe our technology and service offerings may provide a distinct competitive advantage. We are currently in discussions with several groups for deploying our RPCs for remediation projects (primarily for oil spills, tank bottom sludge and drill cuttings) in Saudi Arabia, Qatar and Texas. Saudi Arabia has the objective to create a circular carbon economy that will ultimately have zero wasted hydrocarbons. Our technology is able to process tank bottom sludge, drill cuttings, and soils form hydrocarbon spills, returning the sand to less than 0.5% contamination while reclaiming the oil for waste energy use.

Increase of Revenue via New Service and Product Offerings.

To date, we have focused on the remediation of soil contaminated by oil. We are in the process of expanding our services to include the remediation of water and the recovery of hydrocarbons from water through our exclusive license with solvAQUA. We also intend to target other hydrocarbon remediation businesses that focus on, among other things, the cleaning of tank bottom sludge, and the cleaning of the water used from drilling oil wells. Oil producers generally pay to dispose of sludge at the bottom of storage tanks and contaminated water produced from the drilling of oil wells. We believe that our technologies could be used to clean the contaminated water produced from drilling, while simultaneously recovering the heavy crude. We believe we will be able to offer these services at a cost that is very competitive with current methods and that our ability to recover the heavy crude for resale will give us a competitive advantage. The patent pending RPC technology, in conjunction with the enzymatic water remediation technology that we have licensed from solvAQUA, have the potential to eradicate all oil evaporation ponds and landfills in the United States presently utilized for disposal of tank bottom sludge and drill cutting waste. We are currently in early stage discussions relating to some of these remediation projects.

Strategic Acquisitions and Licenses Targeting Complementary Technologies

We intend to seek out opportunities to acquire or license only specific technologies that are either complementary to our existing product offerings or that will allow us to expand into the environmental infrastructure markets. We are currently negotiating a license for smart sensor technologies for autonomous vehicles that we believe could be embedded directly into the asphaltic cement we intend to produce from the hydrocarbons we extract, providing the basis for smart roads and infrastructure. We believe that these sensors, which are self-powered, could be used to provide information about traffic, road conditions and repair needs as well as allowing the roads to communicate directly with autonomous vehicles enabling these vehicles to sense the road in all weather conditions. By complementing the asphaltic cement we expect to produce with integrated sensors for automated vehicles, we believe that we will be able to offer a smart road – moving this company from one of “Waste to Road” to one of “Waste to Smart Road”.

Redeployment of the Metallic Separation Technology

Our licensed metallic separation technology has successfully recovered precious metals including, but not limited to, gold, palladium, platinum, rodium and silver. We intend to modify our existing metallic separation equipment to allow us to capture more precious metals. We intend to redeploy our metallic separation technology machines in conjunction with our RPC machines to locations where precious metals have been detected in the soil and to standalone locations to process mine tailings and other soils.

Other Holdings

Historically, as part of our strategy to find and invest in technologies that might develop synergies with our existing businesses, we have invested in other companies and/or entities. Not all of our investments to date have developed into complementary technologies and/or businesses, but with our management’s assistance, many of them have still become successful and accretive to our Company’s value. Over time, we intend to divest our ownership of companies that are not synergistic with our business.

Scepter Holdings

In 2012, we provided secured loan financing and assistance to Vivaceuticals, Inc. (“Vivaceuticals”) for the development and commercialization of two bioactive beverages and one weight loss beverage. In 2018, Scepter Holdings, Inc. (OTCMarkets: BRZL), a company that manages the sales and development of consumer-packaged goods, purchased certain assets of Vivaceuticals, and in 2019, we received 800,000 shares of preferred stock in Scepter Holdings, Inc. in exchange for extinguishing our loan, which had become an obligation of Scepter Holdings, Inc. The Company has since converted such shares of preferred stock into 800,000,000 shares of common stock of Scepter Holdings, Inc., which represents a market value of approximately $4,000,000 as of the date of January 27, 2021.

Odyssey Group International

In 2014, we acquired a minority interest in Odyssey Group International, Inc. (“Odyssey”) (OTCQB: ODYY), a trans-disciplinary product development enterprise involved in the discovery, development and commercialization of a broad range of products applied to targeted segments of the health care industry. We also have provided a $750,000 secured loan Odyssey, which they used to acquire a license to use and develop a new technology called CardioMap®, which is an advanced technology for early non-invasive testing for heart disease. The loan is secured by Odyssey’s assets, and we are entitled to receive a percentage of Odyssey’s total gross sales until the loan has been repaid in full. During June 2020, we converted the outstanding secured loan into 809,578 shares of Odyssey common stock. We presently own 3,309,578 shares of Odyssey common stock representing a market value of approximately $1,373,475, as of January 27, 2021.

Future Products; Research and Acquisition

We intend to identify, develop or acquire, and bring to market products primarily in the Clean Tech sector with a primary focus on the petroleum, mining and minerals, and alternative energy industries, as well opportunities that may arise in the natural and formulary products industry. Our general approach is to select products or processes that are at or near commercial viability, or that we believe can be substantially developed for commercialization. We then negotiate agreements to either acquire or to provide secured loan financing to these companies to complete their development, testing and product launches in exchange for control of, or a significant ownership interest in, the products or companies.

History

The Company was originally organized on November 1, 2006 as a limited liability company in the State of Nevada as Genecular Holdings, LLC. The Company’s name was changed to NGI Holdings, LLC on November 3, 2006. On April 30, 2008, the Company was converted to a Nevada corporation and changed its name to Vivakor, Inc. pursuant to Articles of Conversion filed with the Nevada Secretary of State.

We have the following direct and indirect wholly-owned active subsidiaries: VivaVentures Management Company, Inc., a Nevada corporation, VivaSphere, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, and RPC Design and Manufacturing LLC, a Utah limited liability company. We have a 99.95% ownership interest in VivaVentures Energy Group, Inc., a Nevada Corporation; the 0.05% minority interest in VivaVentures Energy Group, Inc. is held by a private investor unaffiliated with the Company. We also have an approximate 49% ownership interest in Vivakor Middle-East Limited Liability Company, a Qatar limited liability company.

Regulations Affecting our Business

The Company’s business is subject to federal, state and local laws, regulations and policies, including laws regulating the removal of natural resources from the ground and the discharge of materials into the environment. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Exploration and exploitation activities are also subject to federal, state and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of exploration methods and equipment. Environmental and other legal standards imposed by federal, state or local authorities are constantly evolving, and typically in a manner which will require stricter standards and enforcement, and increased fines and penalties for noncompliance. Such changes may prevent us from conducting planned activities or increase our costs of doing so, which would have material adverse effects on our business. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages that we may not be able to or elect not to insure against due to prohibitive premium costs and other reasons. Unknown environmental hazards may exist on our mining claims, or we may acquire properties in the future that have unknown environmental issues caused by previous owners or operators, or that may have occurred naturally.

Failure to comply with applicable federal, state, local or foreign laws or regulations could subject our company to enforcement action, including product seizures, recalls, withdrawal of marketing clearances and civil and criminal penalties, any one or more of which could have a material adverse effect on our company’s businesses. We believe that our company is in substantial compliance with such governmental regulations. However, federal, state, local and foreign laws and regulations regarding the manufacture and sale of medical devices are subject to future changes. There can be no assurance that such changes would not have a material adverse effect on our company.

Intellectual Property

We own two issued US patents, two pending US applications, and one pending international PCT patent application covering our propriety technology, specifically:

US Patent 7,282,167 for methods for producing nano-scale particles by vaporizing raw material and then cooling the vaporized raw material using a cooling gas, granted October 16, 2007 and expiring July 23, 2025;

US Patent 9,272,920 for methods for producing ammonia by mixing a first catalyst including a millimeter-sized, granular, ferrous material and a promoter and a second catalyst including discrete nano-sized ferrous catalyst particles that comprise a metallic core with an oxide shell and then reacting hydrogen and nitrogen in the presence of the mixture, granted March 1, 2016 and expiring November 7, 2028; and

Pending US Patent Series Nos. 16/177,210 and 16/554,158, International PCT Application No. PCT Application No. PCT/US2019/048587, and pending Kuwait application KW/P/2020/000111 relating to systems and processes for extracting bitumen from oil sands material which employ a centrifuge and a flash evaporator.

Employees

As of the date of this prospectus, we have 25 full-time or contracted employees, consisting of our CEO, CFO, and additional administrative and direct operations personnel. None of these employees are represented by a labor union or subject to a collective bargaining agreement. We have never experienced a work stoppage and our management believes that our relations with employees are satisfactory.

Properties

We do not own real property. We currently lease executive office space in Salt Lake City, Utah, and Irvine, California. The Company also leases warehouses in Salt Lake City, UT and have paid to be on a land site in Vernal, UT. We believe these facilities are in good condition but that we may need to expand our leased space and warehouses as business increases.

Legal Proceedings

From time to time, we may become involved in various legal actions that arise in the normal course of business. We are not currently involved in any material disputes and do not have any material litigation matters pending.

MANAGEMENT

As of the date of this prospectus, our directors, executive officers and significant employees are as follows:

Name	Age	Position(s)
Matthew Nicosia	46	Chief Executive Officer (Principal Executive Officer) and Director
Tyler Nelson	40	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Dr. Daniel Hashim	37	Chief Scientific Officer
Al Ferrara	69	Director
Joseph Spence	46	Director
Matthew Balk	60	Director
Trent Staggs	46	Director

Background of Officers and Directors

Matthew Nicosia joined Vivakor as Chief Executive Officer and Chairman of the Board in 2011. Prior to joining the Company, Mr. Nicosia co-founded Dermacia Inc. in 1999, a dermatology product development Company. From December 2012 through December 2015, concurrent with his time serving as Chairman and Chief Executive Officer of Vivakor, Mr. Nicosia served as the interim Chief Executive Officer of Vivaceuticals, d/b/a Regeneca Worldwide. In February 2019, Mr. Nicosia joined Ridepair Inc., a software development company focused on the transportation market, as Chairman of the Board. Mr. Nicosia joined the Board of Directors of NarcX Solutions Inc., a developer of onsite drug destruction technologies in June 2019. During 2018, Mr. Nicosia co-founded and has since served as co-Chairman of the Board of Prosperity Utah, a non-profit economic think tank focused on the State of Utah. Since April 2018, Mr. Nicosia has served on the Board of Directors of CannapharmaRx Inc., a public company which trades on the OTC Markets. Mr. Nicosia received his Bachelor of Arts degree from Brigham Young University and a MBA from Pepperdine University. Mr. Nicosia is qualified to serve on our Board of Directors based on his in depth knowledge of the Company as Chief Executive Officer and because of his extensive experience with thermal vaporization technologies, business development in the Middle East and U.S. capital markets experience.

On November 16, 2015, the Consumer Protection Branch of the Department of Justice of the United States of America initiated an action, on behalf of the Food and Drug Administration, against Vivaceuticals, d/b/a Regeneca Worldwide, and Mr. Nicosia alleging various violations of the Federal Food, Drug, and Cosmetic Act in relation to the manufacturing, labeling and distribution of adulterated dietary supplements. The complaint sought a permanent injunction against Regeneca Worldwide for unlawfully distributing unapproved new drugs, and adulterated and misbranded dietary supplements. A consent decree of permanent injunction was filed on February 8, 2017. The consent decree prohibits Regeneca from marketing unapproved new drugs, and adulterated and misbranded dietary supplements. The consent decree also provides that before Regeneca can resume operations, it must, among other things, hire good manufacturing practice and labeling experts, implement procedures to comply with good manufacturing practice and labeling requirements and receive written permission from the FDA to resume operations, and Mr. Nicosia is required to notify the FDA and accept their inspections if he works in the pharmaceutical industry. Regeneca was also required to destroy all remaining products. Vivaceuticals sold its assets to Scepter Holdings, Inc. in 2018 and is no longer in operation.

Tyler Nelson joined Vivakor on a part-time basis as Chief Financial Officer in 2014 and has served as full-time Chief Financial Officer since September 2020. Mr. Nelson is a CPA who worked from 2006 to 2011 in Audit and Enterprise Risk Services at Deloitte LLP (USA) and later at Withum+Brown, PC. He worked with clients with assets of more than $100 billion and annual revenues of more than $15 billion, which are considered some of the most respected financial institutions in the world. In 2011, Mr. Nelson began working for LBL Professional Consulting, Inc. where he provided merger and acquisition, initial public offering, and interim chief financial officer services to clients. Mr. Nelson continues to sit on the Board of Directors and remains an officer of LBL Professional Consulting, Inc. Mr. Nelson earned a Master’s Degree in Accountancy from the University of Illinois- Urbana-Champaign, and a Bachelor’s Degree in Economics with a minor in Business Management from Brigham Young University.

Dr. Daniel Hashim joined Vivakor as Chief Scientific Officer in 2017. Dr. Hashim has extensive experience in the areas of nanoscience research, advanced materials synthesis, characterization, application, innovation and technological entrepreneurship. In addition to leading scientific efforts for Vivakor and its related companies, Dr. Hashim has served as the Founder, Chairman and CEO of CSS Nanotech, Inc. (“CSS”) since 2014. CSS is a nonmaterials research and development company that designs and commercializes useful structural nanomaterials that exhibit “safe-to-handle” nanofunctionality on a macro-scale, to include carbon filtration media, water purification, oil spill remediation, structural composite materials, electrode materials, petrochemical refining and thermal management systems. Mr. Hashim holds a Bachelor’s Degree in Materials Science Engineering from Rensselaer Polytechnic Institute, with a PhD from Rice University in the field of Materials Science and NanoEngineering.

Al Ferrara joined Vivakor as a director on September 21, 2020. Mr. Ferrara retired as the National Director of Retail & Consumer Products at BDO USA, LLP in 2016. Mr. Ferrara is a CPA, who worked at BDO USA, LLP in a variety of positions beginning in 1991, and was a member of its board of directors from 2003 to 2010. Mr. Ferrara served as the Northeast Regional Managing Partner at BDO USA, LLP from 2000 to 2003. Mr. Ferrara was also a director representative at Trenwith Capital, Inc. (now BDO Capital Advisors, LLC) from 2000 to 2015 and a member of the retail advisory board at Hilco Retail Consulting from 2013 to 2015. Mr. Ferrara was previously on the Board of Directors for Barnes & Noble, Inc., from August 2016 until the company was sold in August 2019, where he served on its audit committee and compensation committee, and in July 2019, he joined the Board of Directors of Steven Madden, Ltd., where he serves as Chairman of its audit committee and a member of its governance committee. Mr. Ferrara is qualified to serve on our Board of Directors because of his extensive experience in auditing public companies and serving as a director of large public companies.

Joseph Spence joined Vivakor as a director on September 21, 2020. Mr. Spence previously spent the past two years as an investor, advisor, executive and philanthropist specializing in catalyzing high tech and tech infused real estate to create smart, sustainable cities that work for everyone, with ASPIRE Center for Electrified Transportation, We Are Makers Social Impact Initiative and IconIQ Talks. Previously, from 2014 through 2018, he was an executive director at Goldman Sachs leading teams in the Technology, Media and Telecom; Real Estate, Gaming and Lodging; and Structured Finance sectors for the Americas and EMEA regions. From 2007 to 2014, he was an associate director at Standard & Poor’s covering approximately $144 billion in debt, and, from 2006 to 2007, he was an assistant treasurer at Bank of NY Mellon. He started his career as an engineer at the NASA Academy at Goddard Space Flight Center. Mr. Spence holds an MBA from Columbia University and BS in Electrical Engineering Howard University (Magna Cum Laude). Mr. Spence also holds a Master’s degree in Nano & Biotechnology from Harvard University. Mr. Spence is qualified to serve on our Board of Directors because of his extensive experience in raising capital and financing companies through all stages of growth.

Matthew Balk joined Vivakor as a director on September 21, 2020. Mr. Balk previously spent more than 25 years as an investment banker specializing in technology and biotechnology where he raised billions of dollars for both public and private companies and dozens of mergers and acquisitions. In 2011, he left investment banking to start his family office. He has since co-founded several companies including AzurX (Nasdaq: AZRX) and VerifyH20 and invested in a number of other technology companies. Mr. Balk also works as a consultant to a small number of companies in the areas of Biotech and technology in general. Mr. Balk received his MBA from New York University Stern School of Business. Mr. Balk is qualified to serve on our Board of Directors because of his extensive experience acting as an investment banker supporting large public companies.

Trent Staggs joined Vivakor as a director on September 21, 2020. Mr. Staggs brings a 20-year track record of developing and executing on business strategy, teams and relationships. Prior to advising the Vivakor Team, he was on the corporate leadership team of Unicity International, Inc., a global direct sales company that operates in over 35 markets, providing strategic direction and leadership of global integrated systems, software and IT infrastructure. Mr. Staggs has also been directly responsible for financial transactions in excess of 2 billion dollars as a VP at Morgan Stanley and also running his own nationwide financial company. Mr. Staggs served as a consultant for RDM from January 2019 through March 2020, advising with respect to obtaining required permitting from State agencies and other regulatory matters. Mr. Staggs received his Bachelor of Arts degree from the University of Utah and received an MBA from the Marriott School of Management at Brigham Young University. Mr. Staggs is also the Mayor of Riverton, Utah and serves on many boards, providing needed political guidance and consultation to Vivakor and its related companies. Mr. Staggs is qualified to serve on our Board of Directors because of his extensive experience in capital markets and his understanding of Utah regulatory requirements.

Family Relationships

There are no family relationships between any of our directors and executive officers.

Board Composition and Director Independence

Upon the completion of this offering, our common stock is expected to be listed on the Nasdaq Capital Market. Under the rules of the Nasdaq Stock Market LLC (“Nasdaq”), a majority of a listed company’s board of directors must be comprised of “independent” directors, as defined in Rule 5605. In addition, applicable Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit and compensation committees must be independent within the meaning of the applicable Nasdaq rules. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act.

Our Board of Directors consists of five members. The directors are elected at each annual meeting to hold office until the next annual meeting and until their successors are duly elected and qualified. The Company defines “independent” as that term is defined in .

In making the determination of whether a member of the board is independent, our board considers, in addition to Nasdaq rules, among other things, and, transactions and relationships between each director and his immediate family and the Company, including those reported under the caption “Related Party Transactions.” The purpose of this review is to determine whether any such relationships or transactions are material and, therefore, inconsistent with a determination that the directors are independent. On the basis of such review and its understanding of such relationships and transactions, our Board of Directors affirmatively determined that Al Ferrara, Joseph Spence, Matthew Balk and Trent Staggs are qualified as independent and do not have any material relationships with us that might interfere with his exercise of independent judgment.

Board Committees

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each committee has its own charter, which is available on our website at www.vivakor.com. Each of the board committees has the composition and responsibilities described below.

Members will serve on these committees until their resignation or until otherwise determined by our Board of Directors.

Audit Committee

Our Audit Committee is currently comprised of Al Ferrara, Matthew Balk and Trent Staggs, each of whom qualify as an independent director under applicable Nasdaq and SEC rules, and “financially literate” under applicable Nasdaq rules. Our board has determined that Al Ferrara, Matthew Balk and Trent Staggs each qualify as an “audit committee financial expert”, as such term is defined in Item 407(d)(5) of Regulation S-K. Al Ferrara serves as chairman of the Audit Committee.

The Audit Committee oversees our accounting and financial reporting processes and oversee the audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting. The responsibilities of this committee include, but are not limited to:

selecting and recommending to our Board of Directors the appointment of an independent registered public accounting firm and overseeing the engagement of such firm;

approving the fees to be paid to the independent registered public accounting firm;

helping to ensure the independence of the independent registered public accounting firm;

overseeing the integrity of our financial statements;

preparing an audit committee report as required by the SEC to be included in our annual proxy statement;

resolving any disagreements between management and the auditors regarding financial reporting;

reviewing with management and the independent auditors any correspondence with regulators and any published reports that raise material issues regarding the Company’s accounting policies;

reviewing and approving all related-party transactions; and

overseeing compliance with legal and regulatory requirements.

The Audit Committee is authorized to retain independent legal and other advisors, and conduct or authorize investigations into any matter within the scope of its duties.

Compensation Committee

Our Compensation Committee is currently comprised of Trent Staggs, Al Ferrara and Matthew Balk, each of whom qualify as an independent director under applicable Nasdaq rules. Trent Staggs serves as chairman of the Compensation Committee.

Our Compensation Committee assists the board of directors in the discharge of its responsibilities relating to the compensation of the board of directors and our executive officers.

The responsibilities of this committee include, but are not limited to:

reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for our Chief Executive Officer;

reviewing, approving and recommending to our board of directors on an annual basis the evaluation process and compensation structure for our other executive officers;

determining the need for and the appropriateness of employment agreements and change in control agreements for each of our executive officers and any other officers recommended by the Chief Executive Officer or Board of Directors;

providing oversight of management’s decisions concerning the performance and compensation of other company officers, employees, consultants and advisors;

reviewing our incentive compensation and other equity-based plans and recommending changes in such plans to our Board of Directors as needed, and exercising all the authority of our Board of Directors with respect to the administration of such plans;

reviewing and recommending to our Board of Directors the compensation of independent directors, including incentive and equity-based compensation; and

selecting, retaining and terminating such compensation consultants, outside counsel or other advisors as it deems necessary or appropriate.

The Compensation Committee may delegate any of its responsibilities to subcommittees as it deems appropriate. The Compensation Committee is authorized to retain independent legal and other advisors, and conduct or authorize investigations into any matter within the scope of its duties.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee is currently comprised of Trent Staggs, Matthew Balk and Al Ferrara, each of whom qualify as an independent director under applicable Nasdaq rules. Trent Staggs serves as chairman of the Nominating and Corporate Governance Committee.

The purpose of the Nominating and Corporate Governance Committee is to recommend to the Board of Directors nominees for election as directors and persons to be elected to fill any vacancies on the Board of Directors, develop and recommend a set of corporate governance principles and oversee the performance of the Board of Directors.

The responsibilities of this committee include, but are not limited to:

recommending to the Board of Directors nominees for election as directors at any meeting of stockholders and nominees to fill vacancies on the board;

considering candidates proposed by stockholders in accordance with the requirements in the Committee charter;

overseeing the administration of the Company’s code of business conduct and ethics;

reviewing with the entire Board of Directors, on an annual basis, the requisite skills and criteria for board candidates and the composition of the board as a whole;

the authority to retain search firms to assist in identifying board candidates, approve the terms of the search firm’s engagement, and cause the Company to pay the engaged search firm’s engagement fee;

recommending to the Board of Directors on an annual basis the directors to be appointed to each committee of the Board of Directors;

overseeing an annual self-evaluation of the Board of Directors and its committees to determine whether it and its committees are functioning effectively; and

developing and recommending to the board a set of corporate governance guidelines applicable to the Company.

The Nominating and Corporate Governance Committee may delegate any of its responsibilities to subcommittees as it deems appropriate. The Nominating and Corporate Governance Committee is authorized to retain independent legal and other advisors, and conduct or authorize investigations into any matter within the scope of its duties.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics applicable to our principal executive, financial and accounting officers and all persons performing similar functions. A copy of that code is available on our corporate website at www.vivakor.com. We expect that any amendments to such code, or any waivers of its requirements, will be disclosed on our website.

EXECUTIVE COMPENSATION

The following table summarizes information concerning the compensation awarded to, earned by, or paid to, our principal executive officer. No other executive officer received compensation greater than $100,000 in the last two fiscal years.

Name and Principal Position	Year	Salary		Total
Matthew Nicosia,	2020	$	50,000	$	50,000
Chief Executive Officer and Chairman	2019	$	50,000	$	50,000
Tyler Nelson	2020	$	11,520	$	11,520
Chief Financial Officer

Employment Agreements

Matthew Nicosia

On September 24, 2020, we entered into an Employment Agreement with Matthew Nicosia to serve as our Chief Executive Officer. The agreement provides for an annual base salary of $50,000 (the “Nicosia Base Salary”). The Nicosia Base Salary will increase as follows: (i) upon the Company earning a total of at least $3,000,000 in Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) during any calendar year, the Nicosia Base Salary will increase to $100,000 for all calendar years thereafter until if and when further increased pursuant to this Section 4.1; and (ii) for every $1,500,000 increase in EBITDA earned by the Company during any calendar year, the Nicosia Base Salary will increase an additional $50,000 up to a maximum base salary of $350,000. Any increase to the Nicosia Base Salary will be effective the first pay period of the Company after the Company reaches a particular EBITDA amount is achieved that triggers the increase. For example purposes only and not by way of limitation: (i) if on October 31, 2021 the Company reaches $3,000,000 in EBITDA earned during the 2021 calendar year, the Nicosia Base Salary would increase to $100,000 commencing the Company’s first pay period after October 31, 2021; and (ii) if on November 15, 2022 the Company reaches $4,500,000 in EBITDA earned during the 2022 calendar year, the Nicosia Base Salary would increase to $150,000 commencing the Company’s first pay period after November 15, 2022.

The Employment Agreement has a term of three years and automatically extends for successive one-year periods unless terminated by the Company or Mr. Nicosia, with three months advance written notice required. The agreement provides for incremental increases upon the Company’s achievement of specific performance metrics. The Employment Agreement provides for a grant of a stock option to Mr. Nicosia to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price equal to 110% of the fair market value of the Company’s common stock on the date of grant. The stock option will vest after five years of continuous employment, subject to acceleration if Mr. Nicosia is terminated without cause or resigns for good reason. The agreement also provides for an annual bonus of up to 100% of Mr. Nicosia’s then base salary based upon the achievement of certain performance goals established and approved by the Board of Directors; provided, that at any time Mr. Nicosia’s base salary is $200,000 or more, the Company will pay Mr. Nicosia a minimum annual bonus of $200,000 within ninety days after the end of each calendar year. The agreement entitles Mr. Nicosia to receive various employee benefits generally made available to other officers and senior managers of the Company.

Upon termination of Mr. Nicosia’s employment by Mr. Nicosia for good reason, by the Company without cause, by the Company because of disability, or upon the Company’s or Mr. Nicosia’s decision not to renew Mr. Nicosia’s employment in accordance with the automatic successive one-year extensions, the Company will pay or provide Mr. Nicosia (i) any unpaid base salary and any accrued vacation through the date of termination; (ii) amounts payable under any Company bonus plans in which Mr. Nicosia is eligible to participate as of the date of the termination of his employment on a pro-rated basis; (iii) for a period of 12 months, Mr. Nicosia’s then current monthly base salary multiplied by 2 (but not to exceed $150,000); (iv) outplacement services for Mr. Nicosia for a period of 12 months with an outplacement firm selected by Mr. Nicosia; (v) at Mr. Nicosia’s election to continue health insurance coverage under COBRA, Mr. Nicosia’s monthly premium until (a) the close of the severance period, as defined therein, (b) the expiration of Mr. Nicosia’s continuation of coverage under COBRA, or (c) the date when Mr. Nicosia becomes eligible for substantially equivalent health insurance coverage in connection with new employment; and (vi) the Company will amend each option agreement then in effect by and between the Company and Mr. Nicosia (a) to make 100% of the then unvested shares subject to each option agreement fully vested and fully exercisable, (b) to terminate any rights the Company may have to repurchase unvested shares and (c) to permit Mr. Nicosia to exercise the options provided by each option agreement for a period of ten (10) years following the termination of Mr. Nicosia’s employment. Upon the termination of Mr. Nicosia’s employment because of death, Mr. Nicosia’s estate will be entitled to receive (i) Mr. Nicosia’s then current base salary through the end of the month in which his death occurs, (ii) all accrued and unpaid compensation (including any accrued and unused vacation time) and earned but unpaid bonus payments. Upon the termination of Mr. Nicosia’s employment by the Company for cause or by Mr. Nicosia without good reason, the Company will pay Mr. Nicosia (i) a pro rata amount of Mr. Nicosia’s then current base salary through the date his employment is terminated and (ii) all unpaid bonuses and accrued and unpaid compensation (including any accrued and unused vacation).

Tyler Nelson

On September 24, 2020, we entered into an Employment Agreement with Tyler Nelson to serve as our Chief Financial Officer. The agreement provides for an annual salary of $50,000 (the “Nelson Base Salary”). The Nelson Base Salary is payable in equal installments and will be paid every two weeks. The Nelson Base Salary will increase as follows: (i) upon the Company earning a total of at least $3,000,000 in Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) during any calendar year, the Nelson Base Salary will increase to $100,000 for all calendar years thereafter until if and when further increased pursuant to this Section 4.1; and (ii) for every $1,500,000 increase in EBITDA earned by the Company during any calendar year, the Nelson Base Salary will increase an additional $50,000 up to a maximum base salary of $350,000. Any increase to the Nelson Base Salary will be effective the first pay period of the Company after the Company reaches a particular EBITDA amount is achieved that triggers the increase. For example purposes only and not by way of limitation: (i) if on October 31, 2021 the Company reaches $3,000,000 in EBITDA earned during the 2021 calendar year, the Nelson Base Salary would increase to $100,000 commencing the Company’s first pay period after October 31, 2021; and (ii) if on November 15, 2022 the Company reaches $4,500,000 in EBITDA earned during the 2022 calendar year, the Nelson Base Salary would increase to $150,000 commencing the Company’s first pay period after November 15, 2022.

The Employment Agreement has a term of three years and automatically extends for successive one-year periods unless terminated by the Company or Mr. Nelson, with three months written notice required. The agreement provides for incremental increases upon the Company’s achievement of specific performance metrics. The agreement also provides for an annual bonus of up to 100% of Mr. Nelson’s then base salary upon the achievement of certain performance goals established and approved by the Board of Directors; provided, that at any time Mr. Nelson’s base salary is $200,000 or more, the Company will pay Mr. Nelson a minimum annual bonus of $200,000 within ninety days after the end of each calendar year. The agreement entitles Mr. Nelson to receive various employee benefits generally made available to other officers and senior managers of the Company.

Upon termination Mr. Nelson’s employment by Mr. Nelson for good reason, by the Company without cause, by the Company because of disability, or upon the Company’s or Mr. Nelson’s decision not to renew Mr. Nelson’s employment in accordance with the automatic successive one-year extensions, the Company will pay or provide Mr. Nelson (i) any unpaid base salary and any accrued vacation through the date of termination; (ii) amounts payable under any Company bonus plans in which Mr. Nelson is eligible to participate as of the date of the termination of his employment on a pro-rated basis; (iii) for a period of 12 months, Mr. Nelson’s then current monthly base salary multiplied by 2 (but not to exceed $150,000); (iv) outplacement services for Mr. Nelson for a period of 12 months with an outplacement firm selected by Mr. Nelson; and (v) at Mr. Nelson’s election to continue health insurance coverage under COBRA, Mr. Nelson’s monthly premium until (a) the close of the severance period, as defined therein, (b) the expiration of Mr. Nelson’s continuation of coverage under COBRA, or (c) the date when Mr. Nelson becomes eligible for substantially equivalent health insurance coverage in connection with new employment. Upon the termination of Mr. Nelson’s employment because of death, Mr. Nelson’s estate will be entitled to receive (i) Mr. Nelson’s then current base salary through the end of the month in which his death occurs, (ii) all accrued and unpaid compensation (including any accrued and unused vacation time) and earned but unpaid bonus payments. Upon the termination Mr. Nelson’s employment by the Company for cause or by Mr. Nelson without good reason, the Company will pay Mr. Nelson (i) a pro rata amount of Mr. Nelson’s then current base salary through the date his employment is terminated and (ii) all unpaid bonuses and accrued and unpaid compensations (including any accrued and unused vacation).

Stock Incentive Plan

2021 Equity Incentive Plan

We intend to adopt a new equity incentive plan prior to the offering, which will authorize the issuance of up to 60,000,000 shares of common stock through the grant of stock options (including incentive stock options qualifying under section 422 of the Code and nonstatutory stock options), restricted stock awards, stock appreciation rights, restricted stock units, performance awards, other stock-based awards or any combination of the foregoing.

Outstanding Equity Awards at December 31, 2020

At December 31, 2020 there were granted to Matthew Nicosia options to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price equal to 110% of the fair market value of the Company’s Common Stock on the date of grant. There are no other outstanding equity awards held by our executive officers.

Employee Pension, Profit Sharing or other Retirement Plan

We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

Director Compensation

The table below shows the compensation paid to our directors during the years ended December 31, 2019. Matthew Nicosia was not compensated for acting as a director during fiscal 2019. Each of Al Ferrarra, Matthew Balk and Joseph Spence were appointed to the Board of Directors after January 1, 2020.

Name	Year	Fees Earned or Paid in Cash		Stock Compensation		Total
Pablo Peneloza⁽¹⁾	2020
	2019	$	16,615			$	16,615
Trent Staggs⁽²⁾	2020	$	3,333	$	40,000	$	43,333
	2019	$	84,704			$	84,704
Al Ferraro	2020	$	3,333	$	40,000	$	43,333
Joseph Spence	2020	$	3,333	$	40,000	$	43,333
Matthew Balk	2020	$	3,333	$	40,000	$	43,333

_________________

(1)	Pablo Peneloza resigned from the Company’s Board of Directors on September 21, 2020.
(2)	Trent Staggs received $84,704 from the Company as payment for consulting services rendered in 2019.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding our voting shares beneficially owned as of January 26, 2021 by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding shares of the particular class of voting stock, (ii) each executive officer, (iii) each director, and (iv) all executive officers and directors as a group. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options, warrants and/or other convertible securities. Unless otherwise indicated, voting and investment power relating to the shares shown in the tables for each beneficial owner is exercised solely by the beneficial owner.

For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of January 26, 2021 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

The percentage of beneficial ownership of our common stock before this offering is based on an aggregate of 391,906,585 shares outstanding, consisting of (i) 338,708,562 shares of common stock outstanding as of the date of this prospectus and (ii) 53,198,023 shares of common stock into which all of our preferred stock outstanding as of the date of this prospectus will be converted immediately prior to this offering. The percentage of beneficial ownership of our common stock after the offering is based on shares of common stock outstanding after the offering, which includes the common stock to be sold by us in the offering, assuming no exercise of the over-allotment option by the underwriter.

Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o Vivakor, Inc., 433 Lawndale Drive, South Salt Lake City, UT 84115.

Name and Address of Beneficial Owner	Shares of Common Stock Beneficially Owned	Percentage of Common Stock Beneficially Owned	Shares of Series A Preferred Stock Beneficially Owned	Percentage of Series A Preferred Stock Beneficially Owned	Shares of Series B Preferred Stock Beneficially Owned	Percentage of Series B Preferred Stock Beneficially Owned	Shares of Series B-1 Preferred Stock Beneficially Owned	Percentage of Series B-1 Preferred Stock Beneficially Owned	Shares of Series C-1 Preferred Stock Beneficially Owned	Percentage of Series C-1 Preferred Stock Beneficially Owned
Matt Nicosia, Chief Executive Officer and Director ^(1)(2)(3)	108,689,999	29.88%	2,000,000	100.00%				-	-	-
Tyler Nelson, Chief Financial Officer	0	*
Daniel Hashim, Chief Scientific Officer ⁽³⁾	5,000,000	1.48%
Al Ferrara, Director
Trent Staggs, Director ⁽⁴⁾	10,000,000	2.95%
Matthew Balk, Director	0	*
Joseph Spence, Director	0	*
All Officers and Directors as a group (seven persons)	123,689,999	32.63%	2,000,000	100%

5% Beneficial Stockholders
AKMN Irrevocable Trust ⁽²⁾	108,682,850	29.88%	2,000,000	100%
Sustainable Fuels, Inc. ⁽⁵⁾	20,000,000	5.90%
Regal Growth Inc.⁽⁶⁾	20,000,000	5.90%
Manta Pointe Holdings, Ltd. ⁽⁷⁾									1,330,537	17.37%
Srinivasa Rao Kothapalli ⁽⁸⁾									804,088	10.50%
Quba Holdings, LLC ⁽⁹⁾									772,988	10.09%
Kevin Maloney ⁽¹⁰⁾									537,410	7.02%
Everett Monroe ⁽¹¹⁾
Daniel O. Ritt Trust ⁽¹²⁾
Peter D'Arruda ⁽¹³⁾
Evelyn Pastor ⁽¹⁴⁾
Celedonia Mehr ⁽¹⁵⁾
Maria Teresa Rivera ⁽¹⁶⁾
Dudley Frank⁽¹⁷⁾					4,250,000	62.10%

(continued)

Name and Address of Beneficial Owner	Percentage of Series C-1 Preferred Stock Beneficially Owned After the Offering	Value of Class B Units of VV RII Beneficially Owned	Percentage of VV RII Class B Units Beneficially Owned	Percentage of VV RII Class B Units Beneficially Owned After the Offering	Value of Units of VWFI Beneficially Owned	Percentage of VWFI Units Beneficially Owned	Percentage of VWFI Units Beneficially Owned After the Offering	Shares of Common Stock Beneficially Owned After the Offering	Percentage of Common Stock Beneficially Owned After the Offering
Matt Nicosia, Chief Executive Officer and Director ^(1)(2)(3)	-	-	-	-	-	-	-	133,689,999	-
Tyler Nelson, Chief Financial Officer
Daniel Hashim, Chief Scientific Officer ⁽³⁾								5,000,000
Al Ferrara, Director
Trent Staggs, Director ⁽⁴⁾								10,000,000
Matthew Balk, Director
Joseph Spence, Director
All Officers and Directors as a group (seven persons)								148,689,999

5% Beneficial Stockholders
AKMN Irrevocable Trust ⁽²⁾
Sustainable Fuels, Inc. ⁽⁵⁾
Regal Growth Inc. ⁽⁶⁾
Manta Pointe Holdings, Ltd. ⁽⁷⁾	17.37%							1,330,537
Srinivasa Rao Kothapalli ⁽⁸⁾	10.50%							804,088
Quba Holdings, LLC ⁽⁹⁾	10.09%							772,988
Kevin Maloney ⁽¹⁰⁾	7.02%							537,410
Everett Monroe ⁽¹¹⁾		$90,000	7.88%	7.88%
Daniel O. Ritt Trust ⁽¹²⁾		$65,000	5.69%	5.69%
Peter D'Arruda ⁽¹³⁾		$60,000	5.25%	5.25%
Evelyn Pastor ⁽¹⁴⁾					$70,000	53.85%
Celedonia Mehr ⁽¹⁵⁾					$35,000	26.92%
Maria Teresa Rivera ⁽¹⁶⁾					$25,000	19.23%
Dudley Frank⁽¹⁷⁾

________________________

*		Less than 1%

(1)		The address for these stockholders is: c/o Vivakor, Inc., 433 Lawndale Drive, South Salt Lake City, Utah 84115.

(2)		The shares of common stock beneficially owned by Matthew Nicosia includes 118,682,850 shares of common stock held by AKMN Irrevocable Trust. Matthew Nicosia is the trustee of the AKMN Irrevocable Trust, of which Jonathan Nicosia, Matthew Nicosia’s son, a minor, is the beneficiary. AKMN Irrevocable Trust also holds 2,000,000 shares of Series A preferred stock and has agreed to convert these shares into 25,000,000 shares of our common stock immediately prior to the closing of this offering. Does not include options to purchase 5,000,000 shares of common stock.
(3)		The 5,000,000 shares of Series C-1 Preferred Stock beneficially owned by Dr. Hashim are directly held by CSS Nanotech Ltd. Dr. Hashim is the Chief Executive Officer of CSS Nanotech Ltd.

(4)

The 10,000,000 shares of common stock beneficially owned by Trent Staggs are held by TABBS Irrevocable Trust. Trent Staggs is the trustee of TABBS Irrevocable Trust, of which Brennan Trent Staggs and Brecklyn Staggs, Trent Staggs’s children, are the beneficiaries.

(5)

Sustainable Fuels, Inc. is owned by Debbie Carpenter, who may be deemed the beneficial owner of these shares. The address for Sustainable Fuels, Inc. is 10124 Marchant Avenue Tustin, CA 92872.

(6)		Regal Growth, Inc. is owned by William Reininger, who may be deemed the beneficial owner of these shares. The address for Regal Growth is 2309 Balleyfield Avenue Thousand Oaks, CA 91360.
(7)		Manta Point Holdings, Ltd. is owned by Rakan Al-Ghanim, who may be deemed the beneficial owner of these shares. The address for Manta Point Holdings, Ltd. is Whiteley Chambers Don Street, St. Helier, Jersey JE2 4TR.
(8)		Srinivasa Rao Kothapali’s address is 2501 Jimmy Johnson Suite 500 Port Arthur, TX 77640.
(9)		Quba Holdings, LLC is owned by Benjamin Bequer, who may be deemed the beneficial owner of these shares. The address for Quba Holdings, LLC is 5405 Seashore Drive Newport Beach, CA 92663.
(10)		Kevin Maloney’s address is 15 Crest Circle, Corona Del Mar, CA 92625.

(11)		Everett Monroe’s address is 5813 114th Street, Lubbock TX 79424.
(12)		Daniel O. Ritt Trust’s address is 168 Dover Pkwy, Stewart Manor, NY 11530.

(13)

Peter D’Arruda’s address is 124 Poppleford Place, Cary, NC 27518.

(14)

Evelyn Pastor’s address is 546 Cornell Street, San Lorenzo, CA 94580.

(15)

Celedonia Mehr’s address is 863 Ridgeview Terrace, Fremont, CA 94536.

(16)

Maria Teresa Rivera’s address is 1315 Darlene Avenue, San Mateo CA 94403.

(17)

Dudley Frank’s address is 1827 Loma Roja, Santa Ana, CA 92705.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Related Party Transactions

The following is a description of each transaction since January 1, 2019 and each currently proposed transaction in which:

we have been or are to be a participant;

the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years; and

any of our directors, executive officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

Our current policy with regard to related party transactions is for the Board as a whole to approve any material transactions involving our directors, executive officers or holders of more than 5% of our outstanding capital stock.

We provided secured loan financing and assistance to Vivaceuticals for the development and commercialization of two bioactive beverages and one weight loss beverage. Our Chief Executive Officer, at the time we made the loan, Matthew Nicosia was an officer and director of Vivaceuticals. Vivaceuticals sold its assets to Scepter Holdings, Inc. in 2018. In 2019, we received 800,000 shares of preferred stock in Scepter Holdings, Inc. to extinguish the loan encumbering the assets. We have converted these preferred shares into 800,000,000 shares of Common Stock of Scepter Holdings, Inc., which is traded on the OTC Markets (ticker: BRZL).

In September 2012, we entered into a consulting contract with LBL Professional Consulting, Inc. (“LBL”), of which Tyler Nelson is a common officer, which remains in effect. For the years ended December 31, 2019 and 2018 we paid LBL $231,199 and $180,544, respectively, for a team of consultants serving us. For the nine months ended September 30, 2020 and 2019 the Company paid LBL $134,970 and $152,574. In September 2020, the Company granted non-statutory stock options to LBL to purchase 30,000,000 shares of common stock. As of December 17, 2020 the parties have agreed to amend the contract to reduce the stock options to purchase 10,000,000 shares of common stock. The stock options vest over four years. The stock option is exercisable up to ten years from the grant date. Mr. Nelson is not the beneficiary of the Company and is not be permitted to participate in any discussion, including LBL’s board meetings, regarding any Company stock that LBL may own at any time.

We have an existing note payable issued to TriValley and Triple T, which is owned by Dr. Khalid Bin Jabor Al Thani, the 51% majority-owner of Vivakor Middle East LLC The note is interest free, has no fixed maturity date and will be repaid from revenues generated by Vivakor Middle East LLC. As of December 31, 2019 and 2018 the balance owed was $247,192 and $169,345, respectively. As of September 30, 2020 and September 30, 2019 the balance owed was $288,220 and $193,232.

In July 2020, the Company entered into an agreement with International Metals Exchange, LLC (“IME”), giving IME the option to purchase approximately 1,331 ounces of our precious metal concentrate for approximately $2,800,000. VVMCI, a wholly-owned subsidiary of Vivakor, Inc. owns all of the Class A Units of IME, which have sole voting power for all material matters except for removal of the manager, and VVMCI serves as a manager of IME. The parties are presently negotiating the term for such option. As of September 30, 2020, the Company has sold $54,250 of the precious metal concentrate through this option.

Policy on Future Related-Party Transactions

Following this offering, all future transactions between us and our officers, directors, principal stockholders and their affiliates will be approved by the audit committee, or a similar committee consisting of entirely independent directors, according to the terms of our Code of Business Conduct and Ethics and our Related-Party Transaction Policies and Procedures.

DESCRIPTION OF SECURITIES

Introduction

In the discussion that follows, we have summarized selected provisions of our articles of incorporation (including the amended and restated articles of incorporation we intend to adopt in connection with this offering), bylaws and the Nevada Revised Statutes relating to our capital stock. This summary is not complete. This discussion is subject to the relevant provisions of Nevada law and is qualified by reference to our articles of incorporation and our bylaws. You should read the provisions of our articles of incorporation and our bylaws as currently in effect for provisions that may be important to you.

Current Amended and Restated Articles of Incorporation

Authorized Capital Stock

We are currently authorized to issue up to 1,700,000,000 shares of capital stock consisting of: 1,250,000,000 shares of common stock, par value $0.001 per share, and 450,000,000 shares of preferred stock, par value of $0.001 per share. As of January 26, 2021, there were 338,708,562 shares of common stock that were issued and outstanding and held of record by 476 stockholders. As of January 26, 2021, there were 30,198,023 shares of preferred stock outstanding.

Common Stock

Holders of our common stock are each entitled to cast one vote for each share held of record on all matters presented to the shareholders. Cumulative voting is not allowed.

Holders of our common stock are entitled to receive such dividends as may be declared by our Board of Directors out of funds legally available (subject to the rights of holders of all classes of stock at the time outstanding having prior rights as to dividends) and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities (subject to the rights of holders of all classes of stock at the time outstanding having prior rights as to distributions). Our Board of Directors is not obligated to declare a dividend. It is not anticipated that dividends will be paid in the foreseeable future.

Holders of our common stock do not have preemptive rights to subscribe to additional shares if issued. There is no conversion, redemption, sinking fund or similar provisions regarding the common stock. All outstanding shares of common stock are fully paid and non-assessable.

We expect to effect a -for- reverse stock split of our outstanding common stock prior to the completion of this offering.

Preferred Stock

We are authorized to issue 450,000,000 shares of preferred stock, of which 300,000,000 shares have been designated as follows: (i) 2,000,000 shares of Series A preferred stock, of which all 2,000,000 are outstanding as of September 30, 2020; (ii) 98,000,000 shares of Series B preferred stock, of which 9,594,496 are outstanding as of September 30, 2020; (iii) 50,000,000 shares of Series B-1 preferred stock, of which 18,787,319 are outstanding as of September 30, 2020; (iv) 100,000,000 shares of Series C preferred stock, of which zero are outstanding as of September 30, 2020; and (v) 100,000,000 shares of Series C-1 preferred stock, of which 12,715,821 shares are outstanding as of September 30, 2020.

An additional 150,000,000 shares may be designated from time to time in one or more series as may be determined by our Board of Directors, subject to the protective rights of any classes of preferred stock then outstanding, with the voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions of each such series of undesignated shares to be established by the Board of Directors. Our directors may issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in transactions such as mergers or tender offers if these transactions are not favored by our management.

The Series A Preferred Stock provides holders the right to convert each share into shares of common stock at a conversion price of $0.02 per share, subject to adjustment. Holders of the Series A preferred stock are not entitled to receive dividends. Holders of Series A preferred stock have the right to 25 votes for each share of common stock into which such shares of Series A Preferred Stock may then be converted. Holders of Series A preferred stock are entitled to receive liquidation preference, prior to and in preference to any distribution of any of the assets of the Company to the holders of common stock, or any other series of preferred stock. Immediately prior to the closing of this offering, the outstanding shares of Series A preferred stock will be converted into 25,000,000 shares of common stock.

The Series B Preferred Stock provides holders the right to convert each share into shares of common stock at a conversion price of the lesser of (i) $0.20 per share and (ii) ninety percent (90%) of the market price on the conversion date, subject to adjustment. Holders of Series B preferred stock are entitled to receive dividends at the rate of $0.025 per share per annum. Each Holder of Series B is entitled to vote upon matters presented to the Company’s shareholders on an as converted basis. Holders of Series B preferred stock are entitled to receive liquidation preference, prior to and in preference to any distribution of any of the assets of the Company to the holders of common stock, Series A preferred stock or any other series of preferred stock. Immediately prior to the closing of this offering, the outstanding shares of Series B preferred stock will be converted into 9,594,496 shares of common stock.

The Series B-1 Preferred Stock provides holders the right to convert each share into shares of common stock at a conversion price of the lesser of (i) $0.25 per share and (ii) ninety percent (90%) of the market price on the conversion date, subject to adjustment. Holders of Series B-1 preferred stock are not entitled to receive dividends. Holders of Series B-1 preferred stock are not entitled to vote on matters presented to the shareholders of the Company. Holders of Series B-1 preferred stock are entitled to receive liquidation preference, pari passu with the holders of Series B preferred stock and prior to and in preference to any distribution of any of the assets of the Company to holders of common stock, Series A preferred stock, Series C preferred stock, Series C-1 preferred stock, or any other class of preferred stock. Immediately prior to the closing of this offering, the outstanding shares of Series B-1 preferred stock will be converted into 18,787,319 shares of common stock.

There are currently no shares of Series C preferred stock outstanding. Holders of the Series C preferred stock would have the right to convert each share into common stock in the number of fully paid and nonassessable shares of common stock at a conversion price of the lesser of (i) $0.35 per share and (ii) ninety percent (90%) of the market price on the conversion date, subject to adjustment. Holders of Series C preferred stock would be entitled to receive dividends at the rate of $0.04375 per share per annum. Holders of Series C preferred stock would be entitled to vote upon matter presented to the Company’s shareholders on an as converted basis. Holders of Series C preferred stock are entitled to receive liquidation preference, prior to and in preference to any distribution of any of the assets of the Company to the holders of common stock, Series A Preferred Stock or any other series of preferred stock.

The Series C-1 Preferred Stock provides holders the right to convert each share into shares of common stock at a conversion price of the lesser of (i) $0.40 per share and (ii) ninety percent (90%) of the market price on the conversion date, subject to adjustment. Holders of Series C-1 preferred stock are not entitled to receive dividends. Holders of Series C-1 preferred stock shall be entitled to vote on all matters submitted to the shareholders of the Company on an as-converted basis. Holders of Series C-1 Preferred Stock are entitled to receive liquidation preference, pari passu with the holders of Series C Preferred Stock and prior to and in preference to any distribution of any of the assets of the Company to the holders of common stock, Series A preferred stock or any other series of preferred stock. Immediately prior to the closing of this offering, the outstanding shares of Series C-1 convertible preferred stock will be converted into 12,715,821 shares of common stock.

Amended and Restated Articles to be Adopted in Connection with the Offering

Prior to the closing of this offering, we intend to amend and restate our amended and restated articles of incorporation, to, among other things, effect a -for- reverse stock split and to eliminate the current provisions related to our preferred stock.

The following is a summary of our capital stock and provisions of our amended and restated articles of incorporation, as it will be in effect upon the closing of this offering. For more detailed information, please see the form of amended and restated articles of incorporation and the form of amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part. The descriptions of our common stock and preferred stock reflect changes to our capital structure that will occur upon the closing of this offering.

Upon completion of this offering, we will be authorized to issue shares of common stock, $0.001 par value per share, and shares of preferred stock, $0.001 par value per share, and there will be shares of common stock and no shares of preferred stock outstanding.

Common Stock

Pursuant to the terms of the amended and restated articles of incorporation we intend to adopt in connection with this offering, the holders of common stock will be entitled to one vote per share on all matters to be voted upon by the shareholders, except on matters relating solely to terms of preferred stock. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock will be entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor. See “Dividend Policy.” In the event of our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The holders of our common stock will have no preemptive or conversion rights or other subscription rights. There will be no redemption or sinking fund provisions applicable to our common stock.

Preferred Stock

Pursuant to the terms of the amended and restated articles of incorporation we intend to adopt in connection with this offering, our board of directors will have the authority to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, including dividend rights, conversion right, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any class or series, without further vote or action by the stockholders. Although we have no present plans to issue any shares of preferred stock, the issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could decrease the amount of earnings and assets available for distribution to the holders of common stock, could adversely affect the rights and powers, including voting rights, of the common stock, and could have the effect of delaying, deterring or preventing a change of control of us or an unsolicited acquisition proposal.

Limitation on Directors’ Liability

The Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors. Our Amended and Restated Bylaws include provisions that require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer of our Company. We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors, officers, employees and agents for certain liabilities. Our Amended and Restated Articles of Incorporation do not contain any limiting language regarding director immunity from liability.

The limitation of liability and indemnification provisions under the Nevada Revised Statutes and our Amended and Restated Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

Nevada Anti-Takeover Statute

We may be subject to Nevada’s Combination with Interested Stockholders Statute (Nevada Corporation Law Sections 78.411-78.444) which prohibits an “interested stockholder” from entering into a “combination” with the corporation, unless certain conditions are met. An “interested stockholder” is a person who, together with affiliates and associates, beneficially owns (or within the prior two years, did beneficially own) 10% or more of the corporation’s capital stock entitled to vote.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Empire Stock Transfer with an address at 1859 Whitney Mesa Drive, Henderson, Nevada 89014.

Listing

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “VIVK.”

UNDERWRITING

We have entered into an underwriting agreement, dated , 2021, with , acting as the representative of the several underwriters named below, with respect to the shares of common stock and accompanying purchase warrants. Subject to certain conditions, we have agreed to sell to the underwriters, and the underwriters have severally agreed to purchase, the shares of common stock and accompanying purchase warrants, provided below opposite their respective names.

Underwriter		Number of shares of common stock



Total:

The underwriters are committed to purchase all the shares of common stock offered by us other than those covered by the option to purchase additional shares as described in the “Over-allotment Option” section below. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.

Discount, Commissions and Expenses

The underwriters have advised us that they propose to offer the shares of common stock at the public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share of common stock. The underwriters may allow, and certain dealers may reallow, a discount from the concession not in excess of $ per share of common stock to certain brokers and dealers. After this offering, the public offering price, concession and reallowance to dealers may be changed by the representative. No such change shall change the amount of proceeds to be received by us as set forth on the cover page of this prospectus. The shares of common stock and accompanying purchase warrants are offered by the underwriters as stated herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. The underwriters have informed us that they do not intend to confirm sales to any accounts over which they exercise discretionary authority.

The following table shows the underwriting discount payable to the underwriters by us in connection with this offering:

Per Share and accompanying Purchase Warrants

Total without Exercise of Over-allotment option

Total with Exercise of Over-allotment option

Public offering price

Underwriting discounts and commissions (8.5%)

Proceeds, before expenses, to us

We have agreed to reimburse the underwriters up to $100,000 for their actual and accountable out-of-pocket expenses and up to $75,000 for their non-accountable expenses. We estimate that expenses payable by us in connection with this offering, including reimbursement of the underwriters’ out-of-pocket expenses, but excluding the underwriting discount referred to above, will be approximately $ .

Over-allotment Option

We have granted to the underwriters an option exercisable not later than 45 days after the date of this prospectus to purchase up to an additional shares of common stock (equal to 15% of the number of shares of common stock sold in this offering), solely to cover overallotments, if any, at the public offering price set forth on the cover page hereto less the underwriting discounts and commissions. The underwriters may exercise the option solely to cover overallotments, if any, made in connection with this offering. If any additional shares of common stock are purchased pursuant to the over-allotment option, the underwriters will offer these shares of common stock on the same terms as those on which the other securities are being offered.

Indemnification

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties contained in the underwriting agreement, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

Right of First Refusal

Provided this offering is completed, for a period of twenty-four (24) months from the closing date of this offering, we have granted the representative of the underwriters a right of first refusal to act as our sole investment banker, sole book-runner, sole financial advisor, sole underwriter and/or sole placement agent, as applicable, in the event we decide to pursue an offering of public and private equity and debt securities during such period.

Lock-up Agreements

Our directors, executive officers, and holders of 5% or more of our common stock (measured as of the effective date of the registration statement of which this prospectus forms a part) have entered into lock-up agreements. Under these agreements, these individuals have agreed, subject to specified exceptions, not to sell or transfer any shares of common stock or securities convertible into, or exchangeable or exercisable for, our shares of common stock during a period ending ninety (90) days after the date of this prospectus, without first obtaining the written consent of . Specifically, these individuals have agreed, in part, not to:

offer, pledge, sell, contract to sell, grant, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock, whether now owned or hereafter acquired or with respect to which such person has or later acquires the power of disposition, whether any such transaction is to be settled by delivery of our securities, in cash, or otherwise;

enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our securities, whether any such transaction is to be settled by delivery of our shares of common stock, in cash or otherwise;

make any demand for or exercise any right with respect to the registration of any of our securities; or

publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any of our securities.

Notwithstanding these limitations, these shares of common stock may be transferred under limited circumstances, including, without limitation, by gift, will or intestate succession.

In addition, we have agreed that, for a period of ninety (90) days from the date of this prospectus, with certain exceptions, we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of our shares of common stock or any securities convertible into or exercisable or exchangeable for our shares of common stock; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital, whether any such transaction described in clause (i) or (ii); or (iii) except as provided in the lock-up agreement, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares or securities convertible into or exercisable or exchangeable for shares or any other of our securities; or (iv) publicly disclose the intention to do any of the foregoing for a period commencing on the date hereof and ending ninety (90) days after the closing date of the offering.

Underwriter Warrants

We have also agreed to issue to the representative warrants to purchase a number of our shares of common stock equal to an aggregate of 5% of the shares of common stock sold in this offering (excluding any shares sold for over-allotments). The warrants will have an exercise price equal to 110% of the initial public offering price of the shares of common stock sold in this offering and may be exercised on a cashless basis. The warrants will expire on the fifth anniversary of the effective date of this offering. The warrants provide for one demand registration of the shares of common stock underlying the warrants at our expense commencing 180 days after the effective date of this offering and for a period of no more than five years from the effective date of this offering or the commencement of sales of shares in this offering. In addition, the warrants provide for “piggyback” registration rights at our expense with respect to the underlying shares of common stock for a period of not more than years from the effective date of the of the offering or the commencement of sales of shares in this offering. The warrants will provide for adjustment in the number and price of such warrants (and the shares of common stock underlying such warrants) in the event of recapitalization, merger or other fundamental transaction. The warrants and the underlying shares of common stock have been deemed compensation by FINRA and are therefore subject to FINRA Rule 5110(g)(1). In accordance with FINRA Rule 5110(g)(1), neither the warrants nor any shares of our common stock issued upon exercise of the warrants may be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which the warrants are being issued, except the transfer of any security:

●

by operation of law or by reason of reorganization of the Company;

●

to any FINRA member firm participating in this offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder of the time period;

●

if the aggregate amount of securities of the Company held by either an underwriter or a related person do not exceed 1% of the securities being offered;

●

that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

●

the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period.

In accordance with FINRA Rule 5110(f)(2)(G), the warrants may not contain certain terms.

Stabilization

In connection with this offering, the underwriters may engage in over-allotment transactions, syndicate-covering transactions, stabilizing transactions, penalty bids and purchases to cover positions created by short sales.

Stabilizing transactions permit bids to purchase shares, so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress.

Over-allotment transactions involve sales by the underwriters of shares of common stock in excess of the number of shares the underwriters are obligated to purchase. This creates a syndicate short position, which may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment option. In a naked short position, the number of securities involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing common stock in the open market.

Syndicate covering transactions involve purchases of common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of common stock to close out the short position, the underwriters will consider, among other things, the price of common stock available for purchase in the open market as compared to the price at which they may purchase common stock through exercise of the over-allotment option. If the underwriters sell more shares of common stock than could be covered by exercise of the over-allotment option, and, therefore, have a naked short position, the position can be closed out only by buying common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering.

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions.

Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the prices of our securities. These transactions may occur on the Nasdaq Capital Market or on any other trading market. If any of these transactions are commenced, they may be discontinued without notice at any time.

Passive Market Making

In connection with this offering, the underwriters and any selling group members may engage in passive market making transactions in our common shares on Nasdaq in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers or sales of common shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid that bid must then be lowered when specified purchase limits are exceeded.

Electronic Distribution

This prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters, or by their affiliates. Other than this prospectus in electronic format, the information on any underwriter’s website and any information contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

Other

From time to time, certain of the underwriters and/or their affiliates may in the future provide, various investment banking and other financial services for us for which services they may in the future receive, customary fees. In the course of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in such securities or loans.

Offer restrictions outside the United States

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus and the accompanying prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

LEGAL MATTERS

The validity of the securities being offered by this prospectus has been passed upon for us by Lucosky Brookman LLP, Woodbridge, New Jersey. Certain legal matters in connection with this offering will be passed upon for the underwriters by .

EXPERTS

The consolidated balance sheets of Vivakor, Inc. for the years ended December 31, 2019 and December 31, 2018, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended, have been audited by Hall & Company, an independent registered public accounting firm, as set forth in its report appearing herein and are included in reliance upon such report given on the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information in the registration statement and the exhibits of the registration statement. For further information with respect to us and the securities being offered under this prospectus, we refer you to the registration statement, including the exhibits and schedules thereto.

The SEC maintains a website, which is located at www.sec.gov, which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may access the registration statement of which this prospectus is a part at the SEC’s website. We are subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC.

VIVAKOR, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
September 30, 2020 and December 31, 2019
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations (Unaudited)	F-3
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)	F-4
Consolidated Statements of Cash Flows (Unaudited)	F-5
Notes to the Consolidated Financial Statements (Unaudited)	F-6


December 31, 2019 and 2018
Report of Independent Registered Public Accounting Firm	F-30
Consolidated Balance Sheets	F-31
Consolidated Statements of Operations	F-32
Consolidated Statements of Changes in Stockholders’ Deficit	F-33
Consolidated Statements of Cash Flows	F-34
Notes to the Consolidated Financial Statements	F-35

F-1

VIVAKOR, INC.

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2020			2019			Pro Forma*
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	231,020		$	93,361		$	231,020
Cash and cash equivalents attributed to variable interest entity		–			511,542			–
Marketable securities, trading		1,059,065			–			1,059,065
Inventories		525,744			525,744			525,744
Precious metal concentrate		1,166,709			1,183,228			1,166,709
Prepaid expenses and other assets		112,052			202,392			112,052
Total current assets		3,094,590			2,516,267			3,094,590

Equity method investments		689,464			727,129			689,464
Other investments		3,000			28,000			3,000
Notes receivable		77,213			844,892			77,213
Property and equipment, net		18,180,299			15,925,548			18,180,299
Rights of use assets- operating leases		954,434			1,167,149			954,434
License agreement, net		2,044,017			2,134,639			2,044,017
Intellectual property, net		15,292,580			16,260,169			15,292,580
Total assets	$	40,335,597		$	39,603,793		$	40,335,597

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) AND TEMPORARY EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	1,427,275		$	710,452		$	1,427,275
Accounts payable and accrued expenses attributed to variable interest entity		–			161,415			–
Loans and notes payable		1,669,457			694,145			1,669,457
Stock payable		–			11,800,000			–
Operating lease liabilities, current		302,030			345,442			302,030
Long-term debt, current		1,468,163			126,535			1,468,163
Total current liabilities		4,866,925			13,837,989			4,866,925

Operating lease liabilities, long term		665,482			826,010			665,482
Long-term debt		3,590,349			3,900,923			3,590,349
Deferred income tax liabilities		5,638,450			5,702,751			5,638,450
Total liabilities		14,761,206			24,267,673			14,761,206

Redeemable, convertible preferred stock, $.001 par value; 348,000,000 shares authorized;
Series B- 12.5%, cumulative, 9,594,496 and 21,251,890 issued and outstanding as of September 30, 2020 and December 31, 2019		1,918,900			4,250,380			–
Series B-1- 18,787,319 and 22,758,670 issued and outstanding as of September 30, 2020 and December 31, 2019		4,696,852			5,689,690			–
Series C-1- 12,715,821 and 13,384,760 issued and outstanding as of September 30, 2020 and December 31, 2019		6,573,833			6,841,409			–
Total temporary equity		13,189,585			16,781,479			–

Stockholders' equity (deficit):
Convertible, preferred stock, $.001 par value; 102,000,000 shares authorized; Series A- 2,000,000 issued and outstanding		2,000			2,000			–
Common stock, $.001 par value; 1,250,000,000 shares authorized; 323,857,164 and 285,343,964 were issued and outstanding as of September 30, 2020 and December 31, 2019		323,857			285,344			389,885
Additional paid-in capital		40,395,732			24,793,943			53,521,289
Treasury stock, at cost		(20,000	)		(20,000	)		(20,000	)
Accumulated deficit		(29,491,591	)		(27,848,500	)		(29,491,591	)
Total Vivakor, Inc. stockholders' equity (deficit)		11,209,998			(2,787,213	)		24,399,583
Noncontrolling interest		1,174,808			1,341,854			1,174,808
Total stockholders' equity (deficit)		12,384,806			(1,445,359	)		25,574,391

Total liabilities and stockholders’ equity (deficit) and temporary equity	$	40,335,597		$	39,603,793		$	40,335,597

* See Note 3 of the consolidated financial statements for further details in the preparation our pro forma financial information.

See accompanying notes to consolidated financial statements

F-2

VIVAKOR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019

Revenues	$	392,707		$	–		$	1,416,051		$	–
Cost of revenues		338,437			–			1,323,378			–
Gross profit		54,270			–			92,673			–
Operating expenses:
Sales and marketing		55,380			83,943			304,469			133,712
General and administrative		538,374			352,836			1,151,562			712,228
Bad debt expense		3,000			–			10,645			–
Amortization and depreciation		378,013			393,794			1,201,368			1,112,195
Total operating expenses		974,767			830,573			2,668,044			1,958,135
Loss from operations		(920,497	)		(830,573	)		(2,575,371	)		(1,958,135	)
Other income (expense):
Equity investment loss		763			–			(37,665	)		–
Gain on extinguished debt		–			–			–			607,536
Realized loss on conversion of note receivable		–			–			(121,428	)		–
Unrealized gain (loss) on marketable securities		(1,869,912	)		–			345,915			–
Interest income		1,242			18,795			34,101			54,660
Interest expense		(32,008	)		(552	)		(43,303	)		(4,490	)
Other income		(7,000	)		3,200			33,010			15,589
Total other income (expense)		(1,906,915	)		21,443			210,630			673,295
Loss before provision for income taxes		(2,827,412	)		(809,130	)		(2,364,741	)		(1,284,840	)
Benefit (provision) for income taxes		94,321			(226,603	)		102,492			(279,434	)
Consolidated net loss		(2,733,091	)		(1,035,733	)		(2,262,249	)		(1,564,274	)
Less: Net loss attributable to noncontrolling interests		(364,837	)		(33,623	)		(791,953	)		(62,799	)
Net loss attributable to Vivakor, Inc.	$	(2,368,254	)	$	(1,002,110	)	$	(1,470,296	)	$	(1,501,475	)

Net loss attributable to common shareholders	$	(2,368,254	)	$	(1,002,110	)	$	(1,470,296	)	$	(1,501,475	)
Dividend on preferred stock		108,047			100,218			172,795			419,658
	$	(2,476,301	)	$	(1,102,238	)	$	(1,643,091	)	$	(1,921,133	)
Loss per common share- basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares- basic and diluted		315,554,429			267,884,820			304,262,964			250,724,273
Pro forma loss per common share- basic and diluted*	$	(0.01	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
Pro forma weighted average number of common shares- basic and diluted*		381,652,065			267,884,820			370,360,600			250,724,273

* See Note 3 of the consolidated financial statements for further details in the preparation our pro forma financial information.

See accompanying notes to consolidated financial statements

F-3

VIVAKOR, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(DEFICIT)

(UNAUDITED)

	Series A Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit			Non-controlling Interest			Total Stockholders' Equity (Deficit)
December 31, 2019		2,000,000	$	2,000		285,343,964	$	285,344	$	24,793,943	$	(20,000	)	$	(27,848,500	)		1,341,854		$	(1,445,359	)
Common Stock issued for reduction in stock payable						20,000,000		20,000		11,780,000		–			–			–			11,800,000
Common Stock issued for cash		–		–		228,000		228		40,800		–			–			–			41,028
Conversion of temporary equity Series B, B-1, and C-1 Preferred Stock to Common Stock		–		–		18,285,200		18,285		3,746,404		–			–			–			3,764,689
Stock based compensation		–		–		–		–		34,585		–			–			–			34,585
Issuance of noncontrolling interest		–		–		–		–		–		–			–			624,907			624,907
Dividend paid in Series B-1 Preferred Stock		–		–		–		–		–		–			(172,795	)		–			(172,795	)
Net loss		–		–		–		–		–		–			(1,470,296	)		(791,953	)		(2,262,249	)
September 30, 2020 (unaudited)		2,000,000	$	2,000		323,857,164	$	323,857	$	40,395,732	$	(20,000	)	$	(29,491,591	)	$	1,174,808		$	12,384,806

	Series A Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit			Non-controlling Interest			Total Shareholders' Deficit
December 31, 2018		2,000,000	$	2,000		230,256,188	$	230,257	$	13,363,511	$	(20,000	)	$	(25,194,204	)	$	(7,181	)	$	(11,625,617	)
Common Stock issued for reduction in liabilities						171,000		171		53,329		–			–			–			53,500
Exercise of Common Stock warrants		–		–		210,000		210		83,790		–			–			–			84,000
Conversion of temporary equity Series B and B-1 Preferred Stock to Common Stock		–		–		48,153,842		48,153		9,917,074		–			–			–			9,965,227
Stock based compensation		–		–		–		–		34,587		–			–			–			34,587
Issuance of noncontrolling interest		–		–		–		–		–		–			–			290,000			290,000
Dividend paid in Series B-1 Preferred Stock		–		–		–		–		–		–			(419,658	)		–			(419,658	)
Net loss		–		–		–		–		–		–			(1,501,475	)		(62,799	)		(1,564,274	)
September 30, 2019 (unaudited)		2,000,000	$	2,000		278,791,030	$	278,791	$	23,452,291	$	(20,000	)	$	(27,148,960	)	$	220,020		$	(3,182,235	)

See accompanying notes to consolidated financial statements

F-4

VIVAKOR, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	September 30,
	2020			2019
OPERATING ACTIVITIES:
Consolidated net loss	$	(2,262,249	)	$	(1,564,274	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,201,368			1,112,195
Bad debt expense		10,645			–
Equity investment loss		37,665			–
Gain on extinguished debt		–			(607,536	)
Realized loss on conversion of note receivable		121,428			–
Unrealized gain- marketable securities		(345,915	)		–
Deferred income taxes		(64,301	)		280,940
Stock-based compensation		34,585			34,587
Changes in operating assets and liabilities:
Accounts receivable		(9,000	)		(10,678	)
Precious metal concentrate		16,519			–
Other assets		(27,549	)		(269,367	)
Right of use assets		212,715			–
Operating lease liabilities		(212,715	)		–
Accounts payable		555,408			200,718
Accrued interest on notes receivable		(34,101	)		(54,660	)
Accrued interest on notes payable		43,303			4,490
Net cash used in operating activities		(722,194	)		(873,585	)

INVESTING ACTIVITIES:
Issuance of notes receivable		(9,443	)		(51,544	)
Patent costs- intangible assets		(16,708	)		(1,400	)
Purchase of equipment		(1,115,722	)		(641,926	)
Net cash used in investing activities		(1,141,873	)		(694,870	)

FINANCING ACTIVITIES:
Proceeds from long-term debt		–			2,677,688
Payment of long-term debt		(116,535	)		(1,481,867	)
Proceeds from loans and notes payable		944,673			34,517
Proceeds from sale of common stock		41,028			–
Payment of notes payable		(3,889	)		–
Proceeds from exercised stock warrants for cash		–			84,000
Issuance of noncontrolling interest		624,907			290,000
Net cash provided by financing activities		1,490,184			1,604,338

Net increase (decrease) in cash and cash equivalents		(373,883	)		35,883
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		604,903			916,480
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	231,020		$	952,363

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest		–			–
Income taxes		–			–

Noncash transactions:
Conversion of Series B, B-1, and C-1 Preferred Stock to Common Stock	$	3,764,689		$	9,965,227
Stock issued for a reduction in liabilities	$	11,800,000		$	53,500
Dividend paid in Series B-1 Preferred Stock	$	172,795		$	419,658
Conversion of note receivable to equity investment	$	809,578			–
Extinguished debt for equity investment	$	–		$	25,314
Extinguished notes receivable for equity investment		–		$	800,000
Capitalized interest on construction in process	$	1,136,424		$	730,251
Series C-1 Preferred Stock issued for the purchase of equipment	$	–		$	278,122

See accompanying notes to consolidated financial statements

F-5

VIVAKOR, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Organization and Basis of Presentation

Vivakor, Inc. (collectively “we”, “us,” “our,” “Vivakor” or the “Company”) is a socially responsible operator, acquirer and developer of clean energy technologies and environmental solutions, which is currently focused on soil remediation in the United States and Kuwait, and we have corporate offices in Utah, California, and in Qatar. We specialize in the remediation of soil from properties contaminated by or laden with heavy crude oil and other substances. The Company was originally organized on November 1, 2006 as a limited liability company in the State of Nevada as Genecular Holdings, LLC. The Company’s name was changed to NGI Holdings, LLC on November 3, 2006. On April 30, 2008, the Company was converted to a C-corporation and changed its name to Vivakor, Inc. pursuant to Articles of Conversion filed with the Nevada Secretary of State.

COVID-19

COVID-19 and the U.S. response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations. In March 2020 we temporarily suspended operations in Kuwait and Utah due to COVID-19 government restrictions and as of the date of this report we have not resumed operations.

Note 2. Going Concern

As of September 30, 2020, we had $231,020 of cash on hand and had an accumulated deficit of $29,491,591. There is substantial doubt as to our ability to continue as a going concern based on the understanding that we do not have adequate working capital to finance our day-to-day operations for at least the next twelve months through December 2021. In order to meet our obligations as they come due and to fund the expansion of our asset acquisition strategy and the business of our technologies, we will require new funding to pay for these expenses. We may do so through loans from current stockholders, public or private equity or debt offerings, grants, or strategic arrangements with third parties, and we intend to and are in the process of seeking out possible capital raising efforts. There can be no assurance that additional capital will be available to the Company or if the terms will be favorable.

We currently have no agreements, arrangements, or understandings with any person to obtain additional funds through bank loans, lines of credit or any other sources. We entered into an engagement letter with an investment banker to act as the sole underwriter of a proposed registered public offering of Common Stock by the Company. The agreement is conditioned, amongst other things, the following: The parties entering into an Underwriting Agreement, and the Company meeting the criteria necessary for the inclusion of the Common Stock on the Nasdaq or the NYSE American. We have no material commitments or contractual purchase obligations for the next twelve months. If we are not able to obtain the additional financing on a timely basis, we may be required to further scale down or perhaps even cease the operation of our business. The issuance of additional equity securities could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. Our consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.

F-6

Note 3. Summary of Significant Accounting Policies

Interim Financial Information

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2019. The accompanying interim consolidated balance sheet as of September 30, 2020, the consolidated interim statements of operations for the nine months ended September 30, 2020 and 2019, the consolidated interim statements of changes in stockholders’ equity (deficit) for the nine months ended September 30, 2020 and 2019, and the consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, are unaudited. Separate pro forma information has been prepared in the interim consolidated balance sheet as of September 30, 2020, as well in the consolidated interim statements of operations for the nine months ended September 30, 2020 giving the effect of the conversion of certain preferred stock in conjunction with an anticipated public offering of the Company’s common stock. The unaudited interim consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements. The operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results expected for the full year ending December 31, 2020.

Principles of Consolidation

The consolidated financial statements include the accounts of Vivakor, Inc., its wholly owned and majority-owned active subsidiaries, or joint ventures (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. Inactive entities have no value, assets or liabilities. Vivakor has the following active wholly and majority-owned subsidiaries: Vivaventures Management Company, Inc., Vivaventures Energy Group, Inc. (99%), Vivaventures Oil Sands, Inc., Vivasphere, Inc., Vivasight, Inc. (inactive), and Vivathermic, Inc. (inactive). Vivakor maintains an interest in the following entities: Health America, Inc. (39%, inactive), VVPM 100, LLC (inactive), which is managed by Vivakor, VPM VII, LLC (inactive), which is managed by Vivakor, Vivakor Middle East, LLC (49%, consolidated), VivaRRT, LLC (50%, inactive). The Company withdrew from VivaVentures Precious Metal, LLC (39%, equity method investment) in July 2020. Vivakor manages and consolidates RPC Design and Manufacturing LLC, which includes a noncontrolling interest investment from Vivaopportunity Fund, LLC, which is also managed by Vivaventures Management Company, Inc.

The Company follows ASC 810-10-15 guidance with respect to accounting for Variable Interest Entities (“VIE”). A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of the entity’s expected residual returns. Variable interests are contractual, ownership, or other pecuniary interests that change with changes in the fair value of the entity’s net assets. A party is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides the party with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances. For the nine months ended September 30, 2020 and for the year ended December 31, 2019 the following entity was considered to be a VIE and is consolidated in our consolidated financial statements: RPC Design and Manufacturing, LLC. For the nine months ended September 30, 2020 and for the year ended December 31, 2019 the following entities were considered to be a VIE, but were not consolidated in our consolidated financial statements due to a lack of the power criterion or the losses/benefits criterion: Vivaventures UTSI, LLC, Vivaventures Royalty II, LLC, Vivaopportunity Fund, LLC, and International Metals Exchange, LLC. For the nine months ended September 30, 2020 and for the year ended December 31, 2019 the unaudited financial information for the unconsolidated VIEs is as follows: Vivaventures UTSI, LLC held assets of $3,008,114 and $2,341,192 (where the primary asset represents a receivable from the Company), and liabilities of $40,957 and $40,019. Vivaventures Royalty II, LLC held assets of $2,093,137 and $1,776,360 (where the primary asset represents a receivable from the Company), and liabilities of $300. Vivaopportunity Fund LLC held assets of $2,119,972 and $1,793,000 (where the primary asset represents a noncontrolling interest in units of a consolidated entity of the Company) and no liabilities. International Metals Exchange, LLC held assets of $77,500 and none and no liabilities.

F-7

RPC Design and Manufacturing, LLC: The Company established RPC Design and Manufacturing, LLC (“RDM”) in December 2018 with a business purpose of manufacturing custom machinery and selling or leasing the manufactured equipment in long term contracts with financing or leasing activities to the Company. We own 100% of the voting rights in the RDM. We, as the sole general partner of RDM, have the full, exclusive and complete right, power and discretion to operate, manage and control the affairs of RDM and take certain actions necessary to maintain RDM in good standing without the consent of the limited partners. RDM has entered into a license agreement with the Company indicating that while RDM builds custom machinery incorporating the Company’s hydrocarbon extraction technology, RDM will pay the Company a license fee of $500,000 per Remediation Processing Center manufactured. Creditors of RDM have no recourse to the general credit of the Company. For the nine months ended September 30, 2020 and 2019 investors in RDM have a noncontrolling interest of $2,110,000 and $290,000. For the year ended December 31, 2019, investors in RDM have a noncontrolling interest of $1,464,000 We have the primary risk (expense) exposure in financing and operating the assets and are responsible for 100% of the operation, maintenance and any unfunded capital expenditures, which ultimately could be 100% of a custom machine, and the decisions related to those expenditures including budgeting, financing and dispatch of power. Based on all these facts, it was determined that we are the primary beneficiary of RDM. Therefore, RDM has been consolidated by the Company. Any intercompany revenue and expense associated with RDM and its license agreement with the Company has been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when acquired to be cash equivalents. As of September 30, 2020 and December 31, 2019, the Company does not have any cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2019, the Company had bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company annually evaluates the rating of the financial institutions in which it holds deposits.

Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimated allowance for doubtful accounts, if deemed necessary by management, and based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts, if any, by identifying troubled accounts and by using historical experience applied to an aging of accounts. An allowance for doubtful accounts was considered necessary by management as of September 30, 2020, and December 31, 2019 in the amounts of $30,000 and $21,000, respectively.

Equity Method Investments

Consolidated net income (loss) includes the Company’s proportionate net income or loss of equity investments. The carrying value of the Company’s equity method investments is increased and decreased by the Company’s proportionate share of the net income or loss of the investee. The carrying value of our equity method investment is also decreased by dividends the Company receives from the investee. As of September 30, 2020 and December 31, 2019 the equity method investments consisted of the following:

In 2019 the Company had an investment of $800,000 or 800,000,000 shares of common stock, or a diluted 23% equity holding in Scepter Holdings, Inc. (ticker: BRZL, OTC Markets). For the nine months ended September 30, 2020 and for the year ended December 31, 2019, the Company was attributed a loss on this equity investment in the amount of $37,665 and $72,871. There were no distributions to the Company in 2020 or 2019 from Scepter Holdings, Inc. As of September 30, 2020 and December 31, 2019 the net value of equity investment was $689,464 and $727,129. As of September 30, 2020 and December 31, 2019, the Company’s Chief Executive Officer has an immediate family member who is an officer of Scepter Holdings, Inc. The Company’s 800,000,000 shares of common stock of Scepter Holdings, Inc. has a market value of approximately $4,240,000 as of the date of December 11, 2020 based on the quoted market price.

As of December 31, 2019, the Company held a 39% interest in Vivaventures Precious Metals, LLC for which the fair value of this investment is none. In July 2020, the Company withdrew from this LLC.

F-8

Cost Method Investments

Investments in marketable securities consist of equity securities recorded at fair value. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. We analyze our marketable securities in accordance with Accounting Standard Codification 321 (“ASC 321”). Valuations for marketable securities are based on quoted prices for identical assets in active markets. Where marketable securities were found not be part of an actively traded market, we made a measurement alternative election and estimate the fair value at cost of the investment minus impairment.

As of September 30, 2020, and the year ended December 31, 2019, the Company owns 1,000 Class A LLC Units in each of the following entities, which are not consolidated: Vivaventures UTSI, LLC and Vivaventures Royalty II, LLC. In 2019 the Company purchased 1,000 Class A Units in Vivaopportunity Fund LLC. In aggregate these units amount to $3,000 as of September 30, 2020 and December 31, 2019. These Class A Units give the Company’s management control of the entities but lack the necessary economics criterion, where the Company lacks the obligation to absorb losses of these entities, as well as the right to receive benefits from the LLCs.

As of December 31, 2019, the Company owned 2,500,000 shares of common stock in Odyssey Group International, Inc. (ticker: ODYY, OTC Markets), at a cost of $25,000. For the nine months ended September 30, 2020, the Company noted that this investment began trading on an active market and accounted for such securities based on the quoted price from the OTC Markets where the stock is currently traded (See Note 5). As of December 31, 2019, the Company accounted for such securities at cost minus impairment due to the investment not being traded on an active market noting that the stock was thinly traded.

Convertible Instruments

The Company reviews the terms of convertible debt and preferred stock for indications requiring bifurcation, and separate accounting for the embedded conversion feature. Generally, embedded conversion features where the ability to physical or net-share settle the conversion option is not within the control of the Company or the number of shares is variable are bifurcated and accounted for as derivative financial instruments. (See Derivative Financial Instruments below). Bifurcation of the embedded derivative instrument requires the allocation of the proceeds first to the fair value of the embedded derivative instrument with the residual allocated to the host instrument. The resulting discount to the debt instrument or the redemption value of convertible preferred securities is accreted through periodic charges to interest expense over the term of the agreements or to dividends over the period to the earliest conversion date using the effective interest rate method, respectively.

Derivative Financial Instruments

The Company does not use derivative financial instruments to hedge exposures to cash-flow or market risks. However, certain other financial instruments, such as warrants to purchase the Company’s common stock and the embedded conversion features of debt and preferred instruments that are not considered indexed to the Company’s common stock are classified as liabilities when either (a) the holder possesses rights to net-cash settlement, (b) physical or net share settlement is not within the control of the Company, or (c) based on its anti-dilutive provisions. In such instances, net-cash settlement is assumed for financial accounting and reporting. Such financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period. Fair value for embedded conversion features and option-based derivative financial instruments is determined using the Monte Carlo Simulation or the Black-Scholes Option Pricing Model, respectively.

Other convertible instruments that are not derivative financial instruments are accounted for by recording the intrinsic value of the embedded conversion feature as a discount from the initial value of the instrument and accreting it back to face value over the period to the earliest conversion date using the effective interest rate method.

F-9

Leases

Effective January 1, 2019, we adopted Accounting Standards Codification 842, Leases ("ASC 842"). We determine if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances.

We are the lessee in a lease contract when we obtain the right to control the asset. Operating lease right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on our consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of operations. We determine the lease term by assuming the exercise of renewal options that are reasonably certain. As most of our leases do not provide an implicit interest rate, we use our local incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. ASC 842 is effective for us beginning on January 1, 2019. As of September 30, 2020 and December 31, 2019, we recorded right-of-use assets of $954,434 and $1,167,149 and lease obligations of $967,512 and $1,171,452. On adoption, we recognized additional liabilities, with corresponding ROU assets based on the present value of the lease payments over the lease term under current leasing contracts for existing operating leases. There was no statement of operations or cash flow statement impact on adoption, nor were prior periods adjusted.

The effects of the changes made to our balance sheet at adoption were as follows:

	Balance at December 31, 2018		Impact from ASU 2016-02 Adoption			Balance at January 1, 2019
Financial statement line item:
Right-of-use assets- operating leases	$	–	$	130,383		$	130,383
Current lease liabilities	$	–	$	(130,383	)	$	(130,383	)

Long Lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. No impairment charges were incurred during the years ended December 31, 2019 and 2018 as the Company was still in the early phases of our business plan and operating losses were expected in our early phases. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future.”

Property and equipment, net

Property and equipment are stated at cost or fair value when acquired. Depreciation is computed by the straight-line method and is charged to the statement of operations over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the term of the related lease. Impairment losses are recognized for long-lived assets, including definite-lived intangibles, used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are not sufficient to recover the assets' carrying amount. Impairment losses are measured by comparing the fair value of the assets to their carrying amount.

Interest on long-term debt for the development or manufacturing of Company assets is capitalized to the asset until the asset enters production or use, and thereafter all interest is charged to expense as incurred. Maintenance and repairs are charged to expense as incurred. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the term of the related lease.

F-10

The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows:

Computers, software, and office equipment	1-5 years
Machinery and equipment	3-5 years
Vehicles	5 years
Furniture and fixtures	5 – 10 years
Precious metal extraction machinery (heavy extraction equipment)	10 years
Remediation Processing Centers (heavy extraction and remediation equipment) (“RPC”)	20 years
Leasehold improvements	Lesser of the lease term or estimated useful life

Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service.

Intangible Assets:

We account for intangible assets in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). Intangible asset amounts represent the acquisition date fair values of identifiable intangible assets acquired. The fair values of the intangible assets were determined by using the income approach, discounting projected future cash flows based on management’s expectations of the current and future operating environment. The rates used to discount projected future cash flows reflected a weighted average cost of capital based on our industry, capital structure and risk premiums including those reflected in the current market capitalization. Definite-lived intangible assets are amortized over their useful lives, which have historically ranged from 10 to 20 years. The carrying amounts of our definite-lived intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that the entity may be unable to recover the asset’s carrying amount.

We assess our intangible assets in accordance with ASC 360 “Property, Plant, and Equipment” (“ASC 360”). Impairment testing is required when events occur that indicate an asset group may not be recoverable (“triggering events”). As detailed in ASC 360-10-35-21, the following are examples of such events or changes in circumstances (sometimes referred to as impairment indicators or triggers): (a) A significant decrease in the market price of a long-lived asset (asset group) (b) A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition. (c) A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator (d) An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group) (e) A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group) (f) A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. We have evaluated our intangible assets and found that certain losses and a delay in our business plan does not constitute a triggering event for our intangible assets, and we have assessed that there to be no impairment for the nine months ended September 30, 2020.

Share-Based Compensation

Share-based compensation is accounted for based on the requirements of ASC 718, “Compensation-Stock Compensation’ (“ASC 718”) which requires recognition in the financial statements of the cost of employee, consultant, or director services received in exchange for an award of equity instruments over the period the employee, consultant, or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee, consultant, or director services received in exchange for an award based on the grant-date fair value of the award.

Income tax

Deferred income taxes are provided on the asset and liability method whereby deferred income tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

F-11

Our annual effective tax rate is based on our income and the tax laws in the various jurisdictions in which we operate. Judgment is required in determining our annual tax expense and in evaluating our tax positions. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that the position becomes uncertain based upon one of the following conditions: (1) the tax position is not "more likely than not" to be sustained; (2) the tax position is "more likely than not" to be sustained, but for a lesser amount; or (3) the tax position is "more likely than not" to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without considerations of the possibility of offset or aggregation with other tax positions taken. We adjust these reserves, including any impact on the related interest and penalties, in light of changing facts and circumstances, such as the progress of a tax audit. See Note 20 for further information on income tax.

Revenue Recognition

Effective January 1, 2018, we adopted Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). Approximately 97% of our sales consist of the sale of precious metals with a commitment to deliver precious metals to the customer, and revenue is recognized on the settlement date, which is defined as the date on which: (1) the quantity, price, and specific items being purchased have been established, (2) metals have been delivered to the customer, and (3) payment has been received or is covered by the customer’s established credit limit with the Company.

The new standard contains a five-step approach that entities will apply to determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied. The new standard requires a number of disclosures intended to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue, and the related cash flows. The disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract.

In order to ensure the revenue recognition in the proper period, we review material sales contracts for proper cut-off based upon the business practices and legal requirements of each country

Our performance obligation generally consists of the promise to sell products or complete services to our customers. Control of the products is transferred upon shipment to, or receipt at, our customers' locations, as determined by the specific terms of the contract. Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. Services are completed upon the terms of each contract, specifically in regard to remediation, when the tonnage of contaminated soil is completed and tested our performance obligation is completed and revenue is recognized. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables will generally be collected in less than Nine months, in accordance with the underlying payment terms.

Advertising Expense

Advertising costs are expensed as incurred. The Company did not have advertising expense for the nine months ended September 30, 2020 and 2019.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act, or the JOBS Act, we meet the definition of an “emerging growth company.” We have irrevocably elected to opt-out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. As a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies.

F-12

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for the Company beginning January 1, 2021. We are currently evaluating the impact that ASU 2019-12 may have on our consolidated financial statements.

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which improves Convertible Instruments and Contracts in an Entity’s Own Equity and is expected to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. We are currently evaluating the impact that ASU 2020-06 may have on our consolidated financial statements.

Net Income/Loss Per Share

Basic net income (loss) per share is calculated by subtracting any preferred interest distributions from net income (loss), all divided by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method if their effect is dilutive. Potential dilutive instruments for the nine months ended September 30, 2020 and 2019 include the following: convertible notes payable convertible into approximately 1,072,954 and 551,830 shares of common stock, convertible Series A preferred stock convertible into 20,000,000 shares of common stock (in the event of a public offering of the Company’s common stock this will convert to 25,000,000 shares), convertible Series B preferred stock convertible into approximately 9,594,496 and 36,009,711 shares of common stock, convertible Series B-1 preferred stock convertible into approximately 18,787,319 and 23,544,455 shares of common stock, convertible Series C-1 preferred stock convertible into approximately 12,715,821 and 12,117,160 shares of common stock, stock grants to employees of 500,000 shares of common stock, and warrants for 1,060,000 and 12,080,000 shares of common stock. As of December 31, 2019, a stock payable for 20,000,000 shares of common stock was also outstanding.

Use of Estimates

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

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

Fair Value of Financial Instruments

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

F-13

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

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

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

Note 4. Prepaid Expenses and Other Assets

As of September 30, 2020 and December 31, 2019, our prepaid expenses and other assets consist of the following:

	September 30,		December 31,
	2020		2019
Prepaid expense on option to purchase land, net (a)	$	–	$	117,889
Deposits (b)		112,052		84,503
Total Prepaid Expenses and Other Assets	$	112,052	$	202,392

(a) The Company entered into an Option Agreement in July 2019 for the exclusive right to purchase certain real property commonly known as Asphalt Ridge. The right to purchase the land was purchased for $200,000, which would be applied as a payment on the land if the option is exercised to purchase the land. The agreement gives the Company 12 months for due diligence and to operate on the land. The agreement grants the Company the option to extend the option for an additional 6 months for a cost of $200,000. The Company capitalized the cost of legal expense for this option in the amount of $2,096 bringing the gross value of the option to $202,096. The Company amortized the prepaid over the life of the agreement, 12 months. For the three months ended September 30, 2020 and 2019 amortization expense was $16,841 and $33,683 compared to $117,891 and 33,685 for the nine months ended September 30, 2020 and 2019. In July 2020, the landowner agreed to amend the Option Agreement to extend the term of this option for an additional 6 months at no cost to the Company.

(b) Various deposits with vendors, professional service agents, or security deposits on office and warehouse leases.

F-14

Note 5. Marketable Securities

As of December 31, 2019, the Company owned 2,500,000 shares of common stock in Odyssey Group International, Inc. (“Odyssey”) ticker: ODYY, OTC Markets), at a cost of $25,000. As of December 31, 2019, the Company accounted for such securities at cost minus impairment due to the investment not being traded on an active market noting that the stock was thinly traded. In June 2020, the Company converted the outstanding balance of $809,578 of its note receivable with Odyssey into 809,578 shares of Odyssey common stock according to the terms of the note receivable. As of September 30, 2020, the Company owns 3,309,578 shares of Odyssey common stock. The Company noted that Odyssey’s common stock began trading on an active market and classified them as trading securities with the change in unrealized gains and losses on the investment included in the statement of operations. As of September 30, 2020, all of the Company’s marketable securities are classified as trading securities. The Company accounted for such securities based on the quoted price from the OTC Markets where the stock is traded which resulted in the Company recording an unrealized loss on marketable securities in the statement of operations of $1,869,912 for the three months ended September 30, 2020 compared to unrealized gain of $345,915 for the nine months ended September 30, 2020. As of September 30, 2020, marketable securities were $1,059,065.

Note 6. Inventories

Inventories consist primarily of raw materials (including tar-sand stockpiles) and finished goods (which includes Fenix iron). Inventories are valued at the lower of cost or market (net realizable value). The tar-sand stockpiles consist of 400,000 tons of tar sand stockpile and are anticipated to be used as test material for our extraction remediation units. The stockpiles were acquired at a cost of approximately $0.83 per ton or $333,744. The nano Fenix Iron are finished goods that have a 20-year shelf life and were acquired at cost for $192,000.

Note 7. Precious Metal Concentrate

Precious metal concentrate includes metal concentrates located at the Company’s facilities. Concentrates consist of gold, silver, platinum, palladium, and rhodium. Precious metal concentrate was acquired from our funding agreements for extraction operations with Vivaventures Precious Metals LLC from 2013 through 2016. Our precious metal concentrate requires further refining to be sold as a finished product and is valued at the lower of cost or market (net realizable value).

As of September 30, 2020 and December 31, 2019, the Company carried a refining reserve of $1,166,709 and $1,183,229 against its precious metal concentrate asset based on estimates that the Company received if it were to sell the precious metal concentrate in its current concentrated form to processing refineries. The Company intends to sell our precious metal concentrate in its current state or refine it into dore bars for sale or monetization and investment purposes. In July 2020, the Company entered into an agreement with International Metals Exchange, LLC (“IME”) giving IME the option to purchase approximately 1,331 ounces of our precious metal concentrate for approximately $2,800,000. The parties are presently negotiating the term for such option. As of September 30, 2020, the Company has sold $54,250 of the precious metal concentrate through this option.

As of September 30, 2020, and December 31, 2019 the net realizable value of our precious metal concentrate is $1,166,709 and $1,183,228.

F-15

Note 8. Notes Receivable

Notes receivable consist of the following:

	September 30,		December 31,
	2020		2019
Related party receivable (a)	$	–	$	2,202
Odyssey Group International, Inc. note receivable (b)		–		779,176
Scepter Holdings, Inc. note receivable (c)		77,213		63,514
Total Notes Receivable	$	77,213	$	844,892

(a) In 2019, the Company loaned $2,202 to Vivaopportunity Fund, LLC, which holds a noncontrolling interest in our consolidated financial statements. As of September 30, 2020, the $2,202 has been repaid. The Company is not required to provide any subordinated support to this entity.

(c) We entered into a Master Revolving Note with Scepter Holdings, Inc. (ticker: BRZL, OTC Markets) in January 2019 for the Company to lend up to $70,000 to the holder. The note accrues interest at a rate of 7% per annum and accrues monthly on the outstanding principal. The note is convertible into common shares of Scepter Holdings, Inc. at a rate of $0.002 per share or a 50% discount to market on the date of conversion, whichever is less. The note matured in January 2020 and was amended to extend the maturity for an additional year with a maturity of January 2021 and the maximum amount of note was increased to $100,000.

Note 9. Property and Equipment

The following table sets forth the components of the Company’s property and equipment at September 30, 2020 and December 31, 2019:

	September 30, 2020						December 31, 2019
	Gross Carrying Amount		Accumulated Depreciation		Net Book Value		Gross Carrying Amount		Accumulated Depreciation		Net Book Value

Office furniture and equipment	$	14,011	$	1,552	$	12,459	$	9,617	$	229	$	9388
Vehicles		48,248		14,245		34,003		48,248		7,007		41,241
Precious metal extraction machine- 1 ton		2,280,000		228,000		2,052,000		2,280,000		228,000		2,052,000
Precious metal extraction machine- 10 ton		5,320,000		532,000		4,788,000		5,320,000		532,000		4,788,000

Construction in process:
Nanosponge prototype		17,103		–		17,103		17,103		–		17,103
Bioreactors		1,440,000		–		1,440,000		1,440,000		–		1,440,000
Remediation Processing Unit 1		5,689,736		–		5,689,736		4,983,731		–		4,983,731
Remediation Processing Unit 2		4,049,645		–		4,049,645		2,496,732		–		2,496,732
Remediation Processing Unit 3		97,353		–		97,353		97,353		–		97,353
Total fixed assets	$	18,956,096	$	775,797	$	18,180,299	$	16,692,784	$	767,236	$	15,925,548

F-16

For the year ended December 31, 2019 the Company paid $507,044 with 1,267,608 shares of Series C-1 Preferred Stock for equipment, which has been valued based on similar cash purchases of the Series C-1 Preferred Stock at $0.40 per share. For the nine months ended September 30, 2020 and 2019 depreciation expense was $8,560 and $3,593. For the nine months ended September 30, 2020 and 2019 capitalized interest to equipment from debt financing was $1,136,424 and $730,251 Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service.

Note 10. License Agreements

On August 17, 2017, the Company purchased rights to an exclusive license for the applications and implementations involving the Nanosponge Technology and to use and develop the Nanosponge as we see fit at our sole discretion. The Nanosponge contribution in the Company’s processes is to facilitate a cracking process whereby remediated or extracted oil may be further refined from a crude product to a diesel fuel. The license was valued at $2,416,572 and is amortized over its useful life of 20 years. As of September 30, 2020 and December 31, 2019 the accumulated amortization of the license was $372,555 and $281,933. For the nine months ended September 30, 2020 and 2019 amortization expense of the license was $90,621. Amortization expense for the years 2020 through 2024 is $120,829 in each respective year. As of September 30, 2020 and December 31, 2019 the net value of the license is $2,044,017 and $2,134,639.

Note 11. Intellectual Property, Net

The Company entered into a Contribution Agreement dated January 5, 2015, where proprietary information and intellectual property related to certain petroleum extraction technology (also known as hydrocarbon extraction technology) suitable to extract petroleum (or hydrocarbons) from tar sands and other sand-based ore bodies, and all related concepts and conceptualizations thereof (the “Extraction Technology”) was contributed to VivaVentures Energy Group, Inc., a 99% majority-owned subsidiary of Vivakor, and was assessed a fair market value of $16,385,157, which consists of the consideration of $11,800,000 and the Company assuming a deferred tax liability in the amount of $4,585,157. All ownership in the Extraction Technology (including all future enhancements, improvements, modifications, supplements, or additions to the Extraction Technology) was assigned to the Company and is currently being applied to the Company Remediation Processing Centers, which are the units that remediate material. The Extraction Technology is amortized over a 20-year life. For the nine months ended September 30, 2020 and 2019 the amortization expense of the patents was $614,443. Amortization expense for the years 2020 through 2024 is $819,258 in each respective year. As of September 30, 2020 and December 31, 2019 the net value of the Extraction Technology is $11,742,696 and $12,357,139.

In 2019, the Company began the process of patenting the Extraction Technology and all of its developments and additions since the acquisition, and we have filed a series of patents and capitalized the costs of these patents. As of September 30, 2020, the capitalized costs of these patents are $97,918. The patents are pending and when placed in service, the Company will be begin amortizing the cost over the patent useful life.

The Company entered into an asset purchase agreement dated September 5, 2017, where two patents (US patent number 7282167- Method and apparatus for forming nano-particles and US patent number 9272920- System and method for ammonia synthesis) were purchased and attributed a fair market value of $4,931,380, which consists of the consideration of $3,887,982 and the Company assuming a deferred tax liability in the amount of $1,043,398. The patents grant the Company ownership of a nano catalyst technology that facilitates chemical manufacturing, with a focus on the production of ammonia, specifically for the gas phase condensation process used to create the iron catalyst. The nano catalyst accelerators make the Haber-Bosch process more efficient by increasing the active surface area of standard commercial iron catalysts, thereby lowering the reaction temperature and pressure required for the Haber-Bosch process to occur. As a result, less energy is needed to complete the reaction and create ammonia. The patents are amortized over their useful life of 10 years. For the nine months ended September 30, 2020 and 2019 the amortization expense of the patents was $369,853. Amortization expense for the years 2020 through 2024 is $493,138 in each respective year. As of September 30, 2020 and December 31, 2019 the net value of the patents was $3,451,966 and $3,821,820.

F-17

The following table sets forth the components of the Company’s intellectual property at September 30, 2020 and December 31, 2019:

	September 30, 2020						December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value

Extraction Technology patents	$	97,918	$	–	$	97,918	$	81,210	$	–	$	81,210
Extraction Technology		16,385,157		4,642,461		11,742,696		16,385,157		4,028,018		12,357,139
Ammonia synthesis patents		4,931,380		1,479,414		3,451,966		4,931,380		1,109,560		3,821,820
Total Intellectual property	$	21,414,455	$	6,121,875	$	15,292,580	$	21,397,747	$	5,137,578	$	16,260,169

Note 12. Accounts Payable and Accrued Expenses

Accounts payable consist of the following:

	September 30,		December 31,
	2020		2019
Accounts payable	$	1,147,836	$	422,551
Office access deposits		1,190		1,490
Accrued compensation		112,500		125,000
Accrued tax penalties and interest		165,749		161,411
Accounts payable and accrued expenses	$	1,427,275	$	710,452

As of September 30, 2020 and December 31, 2019 accounts payable attributed to variable interest entities was none and $161,415.

Note 13. Stock Payable

As of December 31, 2019, the Company had an outstanding payable of $11,800,000 payable in common stock to Sustainable Fuels, Inc. (“SFI”) for the Extraction Technology (See Note 11). Before the Common Stock was issued, the owner of SFI died and the matters and affairs of his estate were passed to the executor of his estate. We attempted to contact SFI and the executor of the estate multiple times to issue and send the common stock to the company or appropriate successor of the estate to no avail. As of September 30, 2020, the Company was able to make contact with the new owner of SFI and has issued 20,000,000 shares of Common Stock to SFI per the terms of the agreement.

F-18

Note 14. Loans and Notes Payable

Loans and Notes payable consist of the following:

	September 30,		December 31,
	2020		2019
Various promissory notes and convertible notes (a)	$	81,696	$	80,212
Novus Capital Group LLC Note (b)		354,862		334,775
TriValley & Triple T Notes (c)		288,220		247,192
National Buick GMC (d)		28,077		31,966
Various Bridge Notes (e)		319,083		–
Blue Ridge Bank (f)		205,100		–
Small Business Administration (g)		301,774		–
JP Morgan Chase Bank (h)		90,645		–
Total Loans and Notes Payable	$	1,669,457	$	694,145

_____________

(a) From 2013 through 2018 the Company issued a series of promissory notes and convertible notes with various interest rates ranging up to 12% per annum. The convertible notes convert at the holder’s option after 1 year of issuance and may be converted into shares of common stock. The conversion price is generally equal to the specified per share conversion rate as noted in the note agreements. In 2019 a series of the promissory note holders agreed to settle $632,850 in notes payable for 2,531,400 shares of marketable securities of Odyssey Group International, Inc. owned by the Company. The Company converted $25,314 of its convertible note receivable into 2,531,400 shares of Odyssey Group International, Inc. and transferred these shares to the note holders to extinguish the notes payable and has accounted for these marketable securities at cost or $25,314 and recorded a $607,536 gain on the extinguishment of debt in “Gain (loss) on extinguishment of debt” in the accompanying consolidated statement of operations.

(b) On September 5, 2017, the Company acquired patents in the amount of $4,931,380 in which the Company also agreed to assume the encumbering debt on asset in the amount of $334,775 due in December 2019 with no interest accruing until 2020 and a deferred tax liability of $1,043,398. The Company has agreed with the holder of the encumbering debt to extend the note to January 2, 2021 and accrue interest at 7% per annum commencing January 1, 2020 through July 1, 2020, and 10% per annum commencing July 2, 2020 through January 2, 2021.

(c) The balance of these outstanding notes is due to related parties, specifically the 51% owner of Vivakor Middle East LLC, in which the Company owns 49% and consolidates this entity in its consolidated financial statements. The loans were granted to Vivakor Middle East LLC by the majority owner for operational use with only the agreement of repayment from the net proceeds of such entity’s operations once it commences scaled up operations. No interest accrues on the loans, and no specific maturity date has been agreed upon.

(d) In May 2019, the Company purchased a vehicle for $36,432 and financed $34,932 over six years with an interest rate of 6.24% per annum. Monthly payments of $485 are required and commenced in July 2019.

F-19

(e) In 2020 the Company entered into convertible promissory notes with an aggregate principal of $308,000. The notes accrue interest at 10% per annum and have a maturity of the earlier of 12 months or the consummation of the Company listing its Common Stock on a senior stock exchange. The notes are convertible at the Company’s option into shares of the Company’s common stock at a price equal to 80% of the opening price of the Company’s common stock on the national exchange or the offering price paid by the investors in the financing in connection with the uplist, whichever is lower, or (ii) repaid in cash in an amount equal to the indebtedness being repaid plus a premium payment equal to 15% of the amount being repaid. If an event of default has occurred and the Company does not convert the amounts due under the Note into the Company’s common stock, then the Company will have the option to convert the outstanding indebtedness into shares of the Company’s common stock at a price equal to 80% of the weighted average trading price of the Company’s common stock on the OTC Markets, or be repaid in cash in an amount equal to all principal and interest due under the Note.

(f) In May 2020, the Company entered into a Paycheck Protection Program loan agreement with Blue Ridge Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program. The loan carries an annual interest rate of one (1) percent per annum with payment beginning in the seventh month with monthly payments required until maturity in the 18^th month. The loan may be fully forgivable according to the CARES Act if the Company can provide proper documentation for the use of the proceeds of the loan.

(g) From May through August 2020, the Company entered into various loan agreements with the Small Business Administration for an aggregate loan amount of $299,900. The loans carry an interest rate of 3.75% per annum. The loans shall mature in 30 years.

(h) In July 2020, the Company entered into a Paycheck Protection Program loan agreement with JP Morgan Chase Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program. The loan may be fully forgivable according to the CARES Act if the Company can provide proper documentation for the use of the proceeds of the loan.

Note 15. Commitments and Contingencies

Leases

In June 2019, the Company entered into a Sublease agreement with US Closer, LLC, whereby we agreed to lease approximately 12,061 square feet of office and manufacturing space located in South Salt Lake City, Utah. Pursuant to the Sublease, the sublease expires on December 31, 2020 and requires a monthly lease payment of $6,633.55 plus other pass-through expenses as required under the Primary Lease. The Company is currently negotiating with the landlord to renew this lease as the primary tenant and not as a sublease upon expiration of the lease.

Commencing on September 15, 2019, the Company entered into a five-year lease with Jamboree Center 1 & 2 LLC covering approximately 6,961 square feet of office space in Irvine, CA. Under the terms of the lease agreement, we are required to make the following monthly lease payments: Year 1 $21,927, Year 2 $22,832, Year 3 $23,737, Year 4 $24,712, Year 5 $25,686. As a condition of the lease, we were required to provide a $51,992 security deposit.

The right-of-use asset for operating leases as of September 30, 2020 and December 31, 2019 was $954,434 and $1,167,149. Rent expense for the nine months ended September 30, 2020 and 2019 was $187,343 and $42,077.

Note 16. Long-term Debt

To assist in funding the manufacture of the Company’s Remediation Processing Centers, between 2015 and 2017, the Company entered into two agreements which include terms for the purchase of participation rights for the sale of future revenue of the funded RPCs, and which also require working interest budget payments by the Company.

F-20

The Company accounts for the terms under these contracts for the sale of future revenue under Accounting Standards Codification 470 (“ASC 470”). Accordingly, these contracts include the receipt of cash from an investor where the Company agrees to pay the investor for a defined period a specified percentage or amount of the revenue or a measure of income (for example, gross revenue) according to their contractual right, in which the Company will record the cash as debt and apply the effective interest method to calculate and accrue interest on the contracts. The terms of these agreements grant the holder a prorated 25% participation in the gross revenue of the assets as defined in the agreements for 20 years after operations commence for a purchase price of approximately $2,200,000. In the event that the contract is not fully subscribed by the LLCs it will receive only a prorated participation of the available 25% participation. Under the terms of the agreement, we anticipate Remediation Processing Centers to commence operations and to begin making estimated annual payments of $1,958,000 in January 2021 based on revenue projections from the RPCs.

In accordance with ASC 470, the Company records the proceeds from these contracts as debt because the Company has significant continuing involvement in the generation of the cash flows due to the investor (for example, active involvement in the generation of the operating revenues of the business segment), which constitutes the presence of a factor that independently creates a rebuttable presumption that debt classification is appropriate. The Company has determined its effective interest rates to be between 40% and 41.75% based on each contract’s future revenue streams expected to be paid to the investor. These rates represent the discount rate that equates estimated cash flows with the initial proceeds received from the investor and is used to compute the amount of interest expense to be recognized each period. During the development and manufacturing of the assets the effective interest has been capitalized to the assets. As the assets enter operations or service of their intended use, the effective interest on these contracts will be recognized as interest expense (See Note 9).

In 2016 and 2017, additional consideration to investors to enter into these agreements was granted, and the Company issued to these investors 3,390,000 shares of Series B-1 Preferred Stock with a relative fair value of $0.25 per share or based on conversion terms and price of the Company’s Common Stock at the time of issuance. The Company also issued 3,185,000 common stock warrants to investors. The relative fair value of the warrants and Series B-1 preferred stock in aggregate was $1,488,550, and was recorded as a debt discount, which is amortized to interest expense over the term of the agreements using the effective interest method. During the manufacturing phase of the asset, the interest expense is capitalized to the asset.

Some holders of these participation rights also have the option to relinquish ownership and all remaining benefits of their LLC units in exchange for Common Stock in the Company. Depending on the contract, these options to convert to common stock range from between 1 and 5.5 years. The exercise period ranges from between 1 year to 5.5 years with a step-up discount to market for each year the option is not exercised with a range of between a 5% to a 25% discount to market. Accordingly, under Accounting Standards Codification 815 (“ASC 815”) the Company valued these options at fair value using a Monte Carlo Simulation by a third-party valuation expert, which found the fair value of the options to be nominal. Long-term debt related to these participation rights is recorded in “Long-term debt” on the consolidated balance sheet.

The accounting for the terms under these contracts that call for working interest budget payments by the Company are recorded in current liabilities on the consolidated balance sheet and paid down through pass-through expenses or cash according to the contract. Accordingly, the Company records any unpaid balance of budget payments received in “Long-term debt, current” as these liabilities are generally paid within 12 months after proceeds are received.

F-21

Long-term debt consists of the following:

	September 30, 2020			December 31, 2019
Principal	$	2,196,233		$	2,186,233
Accrued interest		3,107,709			1,971,285
Debt discount		(245,430	)		(256,595	)
Working interest payable		–			126,535
Total long term debt	$	5,058,512		$	4,027,458

Long term debt, current	$	1,468,163		$	126,535
Long term debt	$	3,590,349		$	3,900,923

The following table sets forth the estimated payment schedule of long-term debt as of September 30, 2020:

	Principal		Interest		Total
2021	$	2,338	$	1,955,213	$	1,957,551
2022		3,295		1,954,256		1,957,551
2023		4,643		1,952,908		1,957,551
2024		6,543		1,951,008		1,957,551
2025		9,220		1,948,331		1,957,551
Thereafter		2,170,194		27,563,809		29,734,003
Total	$	2,196,233	$	37,325,525	$	39,521,758

Note 17. Stockholders' Equity

Series A, Series B, Series B-1, Series C and Series C-1 Preferred Stock

The Preferred Stock authorized by the Company may be issued from time to time in one or more series. The Company is authorized to issue 450,000,000 shares of preferred stock. The Company is authorized to issue 2,000,000 shares of Series A Preferred Stock, 98,000,000 shares of Series B Preferred Stock, 50,000,000 shares of Series B-1 Preferred Stock, 100,000,000 shares of Series C Preferred Stock, and 100,000,000 shares of Series C-1 Preferred Stock. The Board of Directors is authorized to fix or alter the number of shares constituting any series of Preferred Stock and the designation thereof.

The Company has issued 2,000,000 shares of Series A Preferred Stock, convertible at a current ratio of 10 shares of Common Stock for each outstanding share of Series A Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. Holders of shares of Series A Preferred Stock will have the right to 25 votes for each share of Common Stock into which such shares of Series A Preferred Stock can then be converted (with a current conversion ratio of 10 shares of Common Stock for each outstanding share of Series A Preferred Stock) and the right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any other Preferred Stock holder in the liquidation, dissolution or winding up of our Company. As of September 30, 2020 and December 31, 2019 the liquidation preference is $400,000. Holders of shares of Series A Preferred Stock are not currently entitled to dividends. The Company has the right, but not the obligation, to redeem shares of Series A Preferred Stock.

F-22

The Company has issued 9,594,496 and 21,251,890 of Series B Preferred Stock as of September 30, 2020, and December 31, 2019, respectively. Shares of Series B Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.20) or a 10% discount to market on the conversion date). Also, automatic conversion of shares of Series B Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series B Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. Certain holders of Series B contractually agreed to an automatic conversion to Common Stock after 4 years of issuance. The Company has the right, but not the obligation, to redeem shares of Series B Preferred Stock one year after issuance. Holders of Series B Preferred Stock will have the right to one vote for each share of Common Stock into which such Series B Preferred Stock is then convertible, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series A Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of September 30, 2020 and December 31, 2019 the liquidation preference was $1,918,899 and $4,383,202. Dividends are 12.5% and cumulative and are payable only when, as, and if declared by the Board of Directors.

The Company has issued 18,787,319 and 22,758,670 of Series B-1 Preferred Stock as of September 30, 2020, and December 31, 2019, respectively. Shares of Series B-1 Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.25) or a 10% discount to market on the conversion date). Also, automatic conversion of shares of Series B-1 Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series B-1 Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series B-1 Preferred Stock one year after issuance. Holders of Series B-1 Preferred Stock have no voting or dividend rights, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stockholder, except holders of Series A and Series B Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of September 30, 2020 and December 31, 2019 the liquidation preference was $4,696,830 and $5,689,690.

The Company has not issued any Series C Preferred Stock as of September 30, 2020, and December 31, 2019, respectively. Shares of Series C Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.35) or a 10% discount to the market price on the conversion date). Automatic conversion of shares of Series C Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series C Preferred Stock or upon the four year anniversary date of the issuance of such shares. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series C Preferred Stock one year after issuance. Holders of Series C Preferred Stock will have the right to one vote for each share of Common Stock into which such Series C Preferred Stock is then convertible, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series B and B-1 Preferred Stock, in the liquidation, dissolution or winding up of our Company. Dividends are 12.5% and cumulative and are payable only when, as, and if declared by the Board of Directors.

F-23

The Company has issued 12,715,821 and 13,384,760 of Series C-1 Preferred Stock as of September 30, 2020, and December 31, 2019, respectively. Shares of Series C-1 Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.40) or a 10% discount to the market price on the conversion date). In addition, automatic conversion of shares of Series C-1 Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series C-1 Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series C-1 Preferred Stock one year after issuance. Holders of Series C-1 Preferred Stock have no voting or dividend rights, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series A, Series B, Series B-1, and Series C Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of September 30, 2020 and December 31, 2019 the liquidation preference was $5,086,328 and $5,353,904.

For the nine months ended September 30, 2020, $3,764,689 or 16,988,866, shares of Series B, Series B-1, and Series C-1 Preferred Stock were converted into 18,285,200 shares of Common Stock.

For the nine months ended September 30, 2020, the Company issued 691,182 shares of Series B-1 Preferred Stock as a $172,795 stock dividend paid to Series B Preferred Shareholders.

For the nine months ended September 30, 2019, $9,965,227, or 48,112,062 shares of Series B and Series B-1 Preferred Stock, were converted into 48,153,042 shares of Common Stock.

Common Stock

The Company is authorized to issue 1,250,000,000 shares of common stock. As of September 30, 2020 and 2019, there were 323,857,164 and 285,343,964 shares of our common stock issued and outstanding, respectively. Treasury stock is carried at cost.

For the nine months ended September 30, 2020, $3,764,689 or 16,988,866, shares of Series B, Series B-1, and Series C-1 Preferred Stock were converted into 18,285,200 shares of Common Stock.

For the nine months ended September 30, 2020 the Company issued 20,000,000 shares of Common Stock for a $11,800,000 reduction in stock payables.

For the nine months ended September 30, 2020 the Company issued 228,000 shares of Common Stock in the amount of $41,028 for cash.

For the nine months ended September 30, 2020, the Company granted stock-based compensation to an employee, including a 500,000 share stock award, which vests at the end of four years. For the nine months ended September 30, 2020 and 2019, stock-based compensation was $34,585.

For the nine months ended September 30, 2019, $9,965,227, or 48,112,062 shares of Series B and Series B-1 Preferred Stock, were converted into 48,153,042 shares of Common Stock.

For the nine months ended September 30, 2019, the Company issued 171,000 shares for a $53,500 reduction of liabilities.

For the nine months ended September 30, 2019, the Company issued 210,000 shares of Common Stock for $84,000 in cash due to exercised warrants.

For the year ended December 31, 2019, the Company granted stock-based compensation to an employee, including a 500,000 share stock award, which vests at the end of 4 years. For the year ended December 31, 2019, stock-based compensation was $34,857.

F-24

Noncontrolling Interest

For the Nine months ended September 30, 2020 and 2019, the Company issued 124,981 and 58,000 units of noncontrolling interest in RPC Design and Manufacturing LLC for cash of $624,907 and $290,000.

Note 18. Temporary Equity

Shares of Series B, B-1, C and C-1 convertible preferred stock hold conversion features providing that, at the holder’s election, the holder may convert the preferred stock into common stock. Upon conversion, the Company may be required to deliver a variable number of equity shares that is determined by using a formula based on the market price of the Company’s Common Stock. After four years from the date of issuance, Series B and C preferred shareholders are forced to automatically convert to Common Stock. For each respective series, the holder may convert their preferred shares to common shares at the original issue price as defined, which ranges from between $0.20 per share to $0.40 per share, at the lesser of the original issue price or 90% of the market price on the conversion date. As of September 30, 2020 and December 31, 2019, the market price of the Company’s Common Stock was $0.44 and $0.20 per share. As of the date of this report the market price of the shares is approximately $0.47 per share. There is no contractual cap on the number of common shares that the Company could be required to deliver on preferred shareholders’ conversions to Common Stock. Because the feature contains no explicit share limit, the Company assumes that it may be forced to cash settle the conversion feature in accordance with the accounting analysis under ASC 815-40-25.

Accordingly, under ASC 815-40-25-10 the Company may be forced to settle these conversion features in cash, specifically since it is unknown as to what date the shareholders’ may convert their preferred stock to common stock and if there will be sufficient authorized and unissued common shares on that date. As of September 30, 2020 and December 31, 2019 the Company did have sufficient authorized and unissued common shares to satisfy all preferred shareholders interest if it were converted to Common Stock, although if the stock price were to drop below $0.02 per share and the Company could not authorize further shares it may be forced to settle such conversions in cash, which may consider them redeemable. Accordingly, Series B, B-1, C and C-1 preferred stock has been classified in temporary equity.

The following table shows all changes to temporary equity during for the nine months ended September 30, 2020 and 2019.

	Convertible Preferred Stock

	Series B						Series B-1						Series C-1
	Shares			Amount			Shares			Amount			Shares			Amount
December 31, 2019		21,251,890		$	4,250,380			22,758,670		$	5,689,690			13,384,760		$	6,841,409
Conversion of Series B, B-1, and C-1 Preferred Stock to Common Stock		(11,657,394	)		(2,331,480	)		(4,662,533	)		(1,165,633	)		(668,939	)		(267,576	)
Dividend paid in Series B-1 Preferred Stock		–			–			691,182			172,795			–			–
September 30, 2020		9,594,496		$	1,918,900			18,787,319		$	4,696,852			12,715,821		$	6,573,833

	Series B						Series B-1						Series C-1
	Shares			Amount			Shares			Amount			Shares		Amount
December 31, 2018		67,271,587		$	13,454,255			28,251,420		$	7,062,780			12,117,160	$	6,334,365
Conversion of Series B and B-1 Preferred Stock to Common Stock		(41,315,626	)		(8,263,125	)		(6,838,216	)		(1,702,102	)		–		–
Series C-1 Preferred Stock issued for the purchase of equipment		–			–			–			–			695,304		278,122
Dividend paid in Series B-1 Preferred Stock		–			–			1,664,166			419,658			–		–
September 30, 2019		25,955,961		$	5,191,130			23,057,370		$	5,780,336			12,812,464	$	6,612,487

F-25

Note 19. Warrants

As of September 30, 2020, the Company had 1,060,000 warrants outstanding. These warrants relate to the warrants issued as an incentive to investors with an investment into the Company. The outstanding warrants were issued at $0.40 per share of Common Stock. The warrants were granted for a one-year period.

Management uses the Black-Scholes option pricing model to determine the fair value of warrants on the date of issuance. The fair value of warrants issued pursuant to the issuance of notes payable was recorded as deferred debt issuance cost and amortized over the remaining term of the associated debt.

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrants on the date of issuance are as follows:

Risk-free interest rate	1.2%
Expected dividend yield	None
Expected life of warrants	1 years
Expected volatility rate	119%

The following table summarizes the activity of the Company’s share purchase warrants:

				Weighted
				average		Aggregate
	Number of			exercise		Intrinsic
	warrants			price		Value
Balance, December 31, 2018		16,485,000		$	0.55	$	–
Expired		(15,195,000	)		0.56		–
Exercised		(210,000	)		0.40		–
Balance, September 30, 2019		1,080,000		$	0.49	$	–

				Weighted
				average		Aggregate
	Number of			exercise		Intrinsic
	warrants			price		Value
Balance, December 31, 2019		1,080,000		$	0.40	$	–
Exercised		(20,000	)		0.40		–
Balance, September 30, 2020		1,060,000		$	0.40	$	–

As of September 30, 2020 and December 31, 2019, the following share purchase warrants were outstanding:

	Number of warrants outstanding		Exercise price		Expiration date
Balance, September 30, 2020		1,060,000	$	0.40	December 2020
Balance, December 31, 2019		1,080,000	$	0.40	December 2020

F-26

Note 20. Income Tax

The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes. ASC 740 requires companies to estimate the annual effective tax rate for current year ordinary income. In calculating the effective tax rate, permanent differences between financial reporting and taxable income are factored into the calculation, and temporary differences are not. The estimated annual effective tax rate represents the Company’s estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision.

The Company recorded income tax benefit of $94,321 and $102,492 for the three and nine months ended September 30, 2020, respectively. The Company is projecting a (6.14%) effective tax rate for the year ending December 31, 2020, which is primarily the result of projected benefit from book losses offset by a valuation allowance increase on the projected net operating losses incurred for the year. The Company recorded income tax expense of $226,603 and $279,434 for the three and nine months ended September 30, 2019, respectively. The Company’s effective tax rate for 2019 was (36.0%) which was the result of the benefit of book losses offset by additional valuation allowance on the net operating losses.

As of December 31, 2019, the Company had estimated federal and state net operating loss (NOL) carryforwards of approximately $11.6 million and $5.4 million, respectively. Federal NOL carryforwards begin to expire in 2026.

Note 21. Related Party Transactions

The Company provided secured loan financing and assistance to the development and commercialization of two bioactive beverages and one weight loss beverage for Vivaceuticals, Inc., which shared a common officer and board of director member with the Company. Vivaceuticals sold its assets to Scepter Holdings, Inc. in 2018. In 2019, the Company received 800,000 shares of preferred stock in Scepter Holdings, Inc. to extinguish the loan encumbering the assets. The Company has converted these preferred shares into 800,000,000 shares of Common Stock of Scepter Holdings, Inc., which is traded on the OTC Markets (ticker: BRZL) (see Note 3). As of September 30, 2020 and December 31, 2019, the Company’s Chief Executive Officer has an immediate family member who is an officer of Scepter Holdings, Inc.

The Company has a consulting contract with Vivaventures Precious Metals, LLC, which is majority owned by an employee of the Company. For the nine months ended September 30, 2020 and 2019 the Company paid Vivaventures Precious Metals LLC none and $290,000 for consulting services rendered.

The Company has a consulting contract with LBL Professional Consulting, Inc. (“LBL”), which shares a common officer with the Company. For the nine months ended September 30, 2020 and 2019, the Company paid LBL $134,970 and $152,574 for rendered services for a team of consultants serving the Company. In September 2020, the Company granted non-statutory stock options to LBL for 30,000,000 shares of Common Stock. As of December 17, 2020 the parties have agreed to amend the contract to reduce the stock options to purchase 10,000,000 shares of common stock. The stock options vest over four years. The stock options are exercisable for up to ten years from the grant date. The common officer is not the beneficiary of the Company and is not permitted to participate in any discussion, including the LBL’s board meetings, regarding any Company stock that LBL may own at any time.

In July 2020, the Company entered into an agreement with IME giving IME the option to purchase approximately 1,331 ounces of our precious metal concentrate for approximately $2,800,000. VVMCI, a wholly-owned subsidiary of Vivakor, Inc. owns all of the Class A Units of IME, which have sole voting power for all material matters except for removal of the manager, and VVMCI serves as a manager of IME. The parties are presently negotiating the term for such option. As of September 30, 2020, the Company has sold $54,250 of the precious metal concentrate through this option.

The Company has a note payable to TriValley and Triple T, which is owned by the 51% majority-owner of Vivakor Middle East LLC. As of September 30, 2020 and September 30, 2019 the balance owed was $288,220 and $193,232.

F-27

The Company has a common board of directors member with CannaPharmaRx Inc. As of September 30, 2020 and December 31, 2019, the Company has a $30,000 and $24,000 account receivable with CannaPharmaRx Inc. for leasing office space to this entity. As of September 30, 2020 and December 31, 2019, the Company recorded an allowance for doubtful accounts on these receivables in the amount of $30,000 and $21,000.

Note 22. Subsequent Events

The Company has evaluated subsequent events through December 31, 2020, the date the financial statements were available to issue.

On October 13, 2020, the Company entered into a convertible promissory note in an amount of $280,500 having an interest rate of 12% per annum. The note bears a 10% Original Issue Discount. The loan shall mature in 1 year and may be convertible at the lower of $0.40 or 80% of the lowest median daily traded price over ten trading days prior to conversion, but in the event of a Qualified Uplist the note may be converted at a 30% discount to market. The Company also issued 100,000 restricted shares with no registration rights in conjunction with this note.

In November 2020, the Company entered into convertible promissory notes with an aggregate principal of $125,000. The notes accrue interest at 10% per annum and have a maturity of the earlier of 12 months or the consummation of the Company listing its Common Stock on a senior stock exchange. The notes are convertible at the Company’s option into shares of the Company’s common stock at a price equal to 80% of the opening price of the Company’s common stock on the national exchange or the offering price paid by the investors in the financing in connection with the uplist, whichever is lower, or (ii) repaid in cash in an amount equal to the indebtedness being repaid plus a premium payment equal to 15% of the amount being repaid. If an event of default has occurred and the Company does not convert the amounts due under the Note into the Company’s common stock, then the Company will have the option to convert the outstanding indebtedness into shares of the Company’s common stock at a price equal to 80% of the weighted average trading price of the Company’s common stock on the OTC Markets, or be repaid in cash in an amount equal to all principal and interest due under the Note.

On November 23, 2020, the Company entered into a convertible promissory note in an amount of $165,000 having an interest rate of 8% per annum. The note bears a $15,000 Original Issue Discount. The loan shall mature in nine months and may be convertible at the $0.40 per share. If an event of default occurs, the conversion price shall be the lesser of $0.25 cents or 70% of the lowest traded price in the prior twenty trading days immediately preceding the notice of conversion. In the event of an Uplist, the conversion price shall equal the lower of 80% of the opening price of the Company’s shares of Common Stock, as listed on the Senior Exchange, on the first day on which the Company’s shares are traded thereon (representing a 20% discount), or 80% of the offering price of the Company’s shares of Common Stock, as offered in a financing in connection with the Uplisting (representing a 20% discount).

In November 2020, the Company assisted in forming a special purpose entity, Viva Wealth Fund I, LLC (“VWFI”), for the purpose of manufacturing, leasing and selling custom equipment to the Company. Wealth Space, LLC, an unaffiliated entity, will manage VWFI and the Company will assist in the day-to-day operations. In November 2020, VWFI commenced a $25,000,000 private placement offering to sell convertible promissory notes, which convert to VWFI LLC units, to accredited investors to raise funds to manufacture equipment that will expand the Company’s second RPC. VWFI has contracted with RDM to assist it in its manufacturing needs for the Company. In the event that VWFI does not raise at least $6,250,000 by the offering termination date, then the convertible notes and or units convert into Vivakor common stock at the greater of $0.45 per share or a 10% discount to market. VWFI unit holders may also sell their units to the Company for their principal investment amount on the 3^rd, 4^th, and 5^th anniversary of the offering termination date. The Company has the option to use cash or common stock to purchase the LLC units if this option is exercised. If the Company chooses to pay in common stock, the number of shares the LLC unit holder will receive will be based on the price that is the greater of $0.45 per share or the 30-day average share price of the Company’s common stock (determined on the 30 days prior to the conversion determination date) discounted by 10%. The Company also has the option to purchase any LLC units where the members did not exercise their conversion option under the same terms and pricing. Any of the Company’s common stock received in any manner related to this offering will carry a trade restriction for a period of two years after the date of sale, in which the holder of the common stock will not, in any 90 day period sell a greater number of shares than 10% of 10 day average trading volume at the time of the proposed sale. If the Company undertakes an underwritten public offering of stock, each holder of this restriction will be required to comply with a six month market stand-off agreement. VWFI has raised $710,000 since its inception in November 2020.

F-28

In November 2020 the Company issued 100,000 shares of Common Stock in the amount of $44,000 in conjunction with the issuance of promissory notes.

In November 2020 the Company issued 300,000 shares of Common Stock in the amount of $121,230 for services.

Subsequent to September 30, 2020, 2,824,500 shares of Series B Preferred Stock, 3,673,664, shares of Series B-1 Preferred Stock, and 5,038,425 shares of Series C-1 Preferred Stock, for an aggregate of $3,498,681, was converted into 11,536,569 shares of Common Stock.

F-29

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Vivakor, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Vivakor, Inc. (the Company) as of December 31, 2019 and 2018, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 2 to the financial statements, the entity has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Hall & Company

Hall & Company CPAS

We have served as the Company's auditor since 2019.

Irvine, CA

November 6, 2020

F-30

VIVAKOR, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2019			2018
ASSETS

Current assets:
Cash and cash equivalents	$	93,361		$	916,480
Cash and cash equivalents attributed to variable interest entity		511,542			–
Accounts Receivable, less allowances of $21,000 and $9,000, respectively		–			270
Inventories		525,744			525,744
Precious metal concentrate		1,183,228			1,183,228
Prepaid expenses and other assets		202,392			36,009
Total current assets		2,516,267			2,661,731

Equity method investment		727,129			–
Other investments		28,000			28,000
Notes receivable		844,892			1,484,325
Property and equipment, net		15,925,548			12,469,019
Rights of use assets- operating leases		1,167,149			–
License agreement, net		2,134,639			2,255,467
Intellectual property, net		16,260,169			17,491,355
Total assets	$	39,603,793		$	36,389,897

LIABILITIES AND STOCKHOLDERS’ DEFICIT AND TEMPORARY EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	710,452		$	324,373
Accounts payable and accrued expenses attributed to variable interest entity		161,415			–
Loans and notes payable		694,145			1,253,584
Stock payable		11,800,000			11,800,000
Operating lease liabilities, current		345,442			–
Long-term debt, current		126,535			316,150
Total current liabilities		13,837,989			13,694,107

Operating lease liabilities, long term		826,010			–
Long-term debt		3,900,923			2,355,659
Deferred income tax liabilities		5,702,751			5,114,348
Total liabilities	$	24,267,673		$	21,164,114


Redeemable, convertible preferred stock, $.001 par value; 348,000,000 shares authorized;
Series B- 12.5%, cumulative, stated at redemption value of outstanding shares, 21,251,890 and 67,271,587 issued and outstanding as of December 31, 2019 and 2018	$	4,250,380		$	13,454,255
Series B-1- stated at redemption value of outstanding shares, 22,758,670 and 28,251,420 issued and outstanding as of December 31, 2019 and 2018		5,689,690			7,062,780
Series C-1- stated at redemption value of outstanding shares, 13,384,760 and 12,117,160 issued and outstanding as of December 31, 2019 and 2018		6,841,409			6,334,365
Total temporary equity		16,781,479			26,851,400

Stockholders' deficit:
Convertible preferred stock, $.001 par value; 2,000,000 shares authorized;
Series A- 2,000,000 issued and outstanding as of December 31, 2019 and 2018		2,000			2,000
Common stock, $.001 par value; 1,250,000,000 shares authorized; 285,343,964 and 230,256,188 were issued and outstanding as of December 31, 2019 and 2018		285,344			230,257
Additional paid-in capital		24,793,943			13,363,511
Treasury stock, at cost		(20,000	)		(20,000	)
Accumulated deficit		(27,848,500	)		(25,194,204	)
Total Vivakor, Inc. stockholders' deficit		(2,787,213	)		(11,618,436	)
Noncontrolling interest		1,341,854			(7,181	)
Total stockholders' deficit		(1,445,359	)		(11,625,617	)
Total liabilities and stockholders’ deficit and temporary equity	$	39,603,793		$	36,389,897

See accompanying notes to consolidated financial statements

F-31

VIVAKOR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended
	December 31,
	2019			2018

Revenues	$	–		$	10,179
Cost of revenues		–			3,550
Gross profit		–			6,629
Operating expenses:
Sales and marketing		18,559			130,288
General and administrative		748,348			307,441
Bad debt expense		12,000			9,000
Amortization and depreciation		1,524,274			1,433,618
Total operating expenses		2,303,181			1,880,347
Loss from operations		(2,303,181	)		(1,873,718	)
Other income (expense):
Equity investment loss		(72,871	)		–
Gain (loss) on extinguished debt		607,536			(126,000	)
Interest income		73,761			83,219
Interest expense		(9,288	)		(395,311	)
Other income		19,039			75,810
Total other income (expense)		618,177			(362,282	)
Loss before provision for income taxes		(1,685,004	)		(2,236,000	)
Benefit (provision) for income taxes		(589,203	)		36,645
Net loss		(2,274,207	)		(2,199,355	)
Less: Net loss attributable to noncontrolling interests		(114,965	)		(21,010	)
Net loss attributable to Vivakor, Inc.	$	(2,159,242	)	$	(2,178,345	)

Basic and diluted loss per share:
Net loss attributable to Vivakor, Inc.	$	(2,159,242	)	$	(2,178,345	)
Less dividend on preferred stock		495,054			1,441,938
	$	(2,654,296	)	$	(3,620,283	)
Loss per common share- basic and diluted	$	(0.01	)	$	(0.02	)
Weighted average number of common shares- basic and diluted		257,611,762			222,185,916

Pro forma loss per common share- basic and diluted*	$	(0.01	)	$	(0.01	)
Pro forma weighted average number of common shares- basic and diluted*		340,007,082			354,826,083

* See Note 3 of the consolidated financial statements for further details in the preparation our pro forma financial information.

See accompanying notes to consolidated financial statements

F-32

VIVAKOR, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit			Non-controlling Interest			Total Stockholders' Deficit
December 31, 2017		2,000,000	$	2,000		221,279,998	$	221,280	$	11,297,419	$	(20,000	)	$	(21,573,921	)		13,829		$	(10,059,393	)
Conversion of Series B and B-1 Preferred Stock to Common Stock		–		–		5,840,560		5,842		1,233,540		–			–			–			1,239,382
Exercise of Common Stock warrants		–		–		130,000		129		51,870		–			–			–			51,999
Conversion of debt to Common Stock		–		–		3,005,630		3,006		748,402		–			–			–			751,408
Dividend paid in Series B-1 Preferred Stock						–		–		–		–			(1,441,938	)		–			(1,441,938	)
Stock based compensation		–		–		–		–		32,280		–			–			–			32,280
Net loss		–		–		–		–		–		–			(2,178,345	)		(21,010	)		(2,199,355	)
December 31, 2018		2,000,000	$	2,000		230,256,188	$	230,257	$	13,363,511	$	(20,000	)	$	(25,194,204	)	$	(7,181	)	$	(11,625,617	)
Conversion of debt to Common Stock		–		–		209,414		209		53,291		–			–			–			53,500
Common Stock issued for services		–		–		1,155,779		1,156		218,441		–			–			–			219,597
Conversion of Series B and B-1 Preferred Stock to Common Stock		–		–		53,492,583		53,492		11,018,527		–			–			–			11,072,019
Dividend paid in Series B-1 Preferred Stock		–		–		–		–		–		–			(495,054	)		–			(495,054	)
Exercise of Common Stock warrants		–		–		230,000		230		91,752		–			–			–			91,982
Stock based compensation		–		–		–		–		48,421		–			–			–			48,421
Issuance of noncontrolling interest		–		–		–		–		–		–			–			1,464,000			1,464,000
Net loss		–		–		–		–		–		–			(2,159,242	)		(114,965	)		(2,274,207	)
December 31, 2019		2,000,000	$	2,000		285,343,964	$	285,344	$	24,793,943	$	(20,000	)	$	(27,848,500	)		1,341,854		$	(1,445,359	)

See accompanying notes to consolidated financial statements

F-33

VIVAKOR, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

	Year Ended
	December 31,
	2019			2018
OPERATING ACTIVITIES:
Net loss	$	(2,274,207	)	$	(2,199,355	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,524,274			1,433,618
Bad debt expense		12,000			9,000
Equity investment loss		72,871			–

(Gain) loss on extinguished debt		(607,536	)		126,000
Interest expense payment paid on behalf of affiliate in shares of preferred stock		–			307,265
Common stock issued for services		219,597			–
Deferred income taxes		588,403			(37,445	)
Stock-based compensation		48,421			32,280
Changes in operating assets and liabilities:
Accounts receivable		(11,730	)		(9,270	)
Other assets		(250,590	)		3,225
Right of use assets		(1,167,149	)		–
Operating lease liabilities		1,167,151			–
Accounts payable		547,494			85,457
Accrued interest on notes receivable		(73,761	)		(83,219	)
Accrued interest on notes payable		9,288			64,420
Net cash used in operating activities		(195,474	)		(268,024	)

INVESTING ACTIVITIES:
Issuance of notes receivable		(112,122	)		(26,280	)
Purchase of investments		–			(1,000	)
Patent costs- intangible assets		(81,210	)		–
Purchase of equipment		(1,861,667	)		(822,553	)
Net cash used in investing activities		(2,054,999	)		(849,833	)

FINANCING ACTIVITIES:
Proceeds from long-term debt		2,418,142			3,206,372
Payment of long-term debt		(2,123,708	)		(2,292,883	)
Proceeds of notes payable		89,960			737,034
Payment of notes payable		(1,480	)		–
Proceeds from exercised stock warrants for cash		91,982			51,999
Issuance of noncontrolling interest		1,464,000			–
Issuance of preferred stock for cash		–			36,900
Net provided by financing activities		1,938,896			1,739,422

Net increase (decrease) in cash and cash equivalents		(311,577	)		621,565
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		916,480			294,915
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	604,903		$	916,480

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest		–			–
Income taxes		–			–

Noncash transactions:
Conversion of Series B and B-1 Preferred Stock to Common Stock	$	11,072,019		$	1,239,382
Conversion of debt to Common Stock	$	53,500		$	751,408
Dividend paid in Series B-1 Preferred Stock	$	495,054		$	1,441,938
Extinguished debt for equity investment	$	25,314		$	–
Extinguished notes receivable for equity investment	$	800,000		$	–
Capitalized interest on construction in process	$	1,061,215		$	551,382
Series C-1 Preferred Stock issued for the purchase of equipment	$	507,044		$	–

See accompanying notes to consolidated financial statements

F-34

VIVAKOR, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

COVID-19

Note 2. Going Concern

As of December 31, 2019 we had $604,903 of cash on hand and had an accumulated deficit of $27,848,500. There is substantial doubt as to our ability to continue as a going concern based on the understanding that we do not have adequate working capital to finance our day-to-day operations for at least the next twelve through September 2021. In order to meet our obligations as they come due and to fund the expansion of our asset acquisition strategy and the business of our technologies, we will require new funding to pay for these expenses. We may raise capital through loans from current stockholders, public or private equity or debt offerings, grants, or strategic arrangements with third parties, and we intend to and are in the process of seeking out possible capital raising efforts. There can be no assurance that additional capital will be available to the Company or if the terms will be favorable.

We currently have no agreements, arrangements, or understandings with any person to obtain additional funds through bank loans, lines of credit or any other sources. We have no material commitments or contractual purchase obligations for the next twelve, months other than the amounts that may be agreed to under our acquisition agreements relating to our remediation operations. If we are not able to obtain the additional financing on a timely basis, we may be required to further scale down or perhaps even cease the operation of our business. The issuance of additional equity securities could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. Our financial statements do not include adjustments that might result from the outcome of this uncertainty.

Note 3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. Separate pro forma earnings per share information has been prepared in the statements of operations for the years ended December 31, 2019 and 2018, giving the effect of the conversion of certain preferred stock in conjunction with an anticipated public offering of the Company’s common stock.

All figures are in U.S. dollars unless indicated otherwise.

F-35

Principles of Consolidation

The consolidated financial statements include the accounts of Vivakor, Inc., its wholly owned and majority-owned active subsidiaries, or joint ventures (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. Inactive entities have no value, assets or liabilities. Vivakor has the following active wholly and majority-owned subsidiaries: Vivaventures Management Company, Inc., Vivaventures Energy Group, Inc. (99%), Vivaventures Oil Sands, Inc., Vivasphere, Inc., Vivasight, Inc. (inactive), and Vivathermic, Inc. (inactive). Vivakor maintains an interest in the following entities: Health America, Inc. (39%, inactive), VVPM 100, LLC (inactive) which is managed by Vivakor, VPM VII, LLC (inactive), which is managed by Vivakor, Vivakor Middle East, LLC. (49%, consolidated), VivaRRT, LLC (50%, inactive), VivaVentures Precious Metal, LLC. (39%, equity method investment). Vivakor manages and consolidates RPC Design and Manufacturing LLC, which includes a noncontrolling interest investment from Vivaopportunity Fund, LLC, which is also managed by Vivaventures Management Company, Inc.

The Company follows ASC 810-10-15 guidance with respect to accounting for Variable Interest Entities (“VIE”). A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of the entity’s expected residual returns. Variable interests are contractual, ownership, or other pecuniary interests that change with changes in the fair value of the entity’s net assets. A party is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides the party with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances. For the years ended December 31, 2019 and 2018 the following entity was considered to be a VIE and is consolidated in our consolidated financial statements: RPC Design and Manufacturing, LLC. For the years ended December 31, 2019 and 2018 the following entities were considered to be a VIE, but were not consolidated in our consolidated financial statements due to a lack of the power criterion or the losses/benefits criterion: Vivaventures UTSI, LLC, Vivaventures Royalty II, LLC, Vivaopportunity Fund, LLC. For the years ended December 31, 2019 and 2018 the unaudited financial information for the unconsolidated VIEs is as follows: Vivaventures UTSI, LLC held assets of $2,341,192 and $1,682,706 (where the primary asset represents a receivable from the Company), and liabilities of $40,019 and $43,428. Vivaventures Royalty II, LLC held assets of $1,776,360 and $1,030,321 (where the primary asset represents a receivable from the Company), and liabilities of $300 and none. Vivaopportunity Fund LLC held assets of $1,793,000 and $1,000 (where the primary asset represents a noncontrolling interest in units of a consolidated entity of the Company) and liabilities of none.

RPC Design and Manufacturing, LLC: The Company established RPC Design and Manufacturing, LLC (“RDM”) in December 2018 with a business purpose of manufacturing custom machinery and selling or leasing the manufactured equipment in long term contracts with financing or leasing activities to the Company. We own 100% of the voting rights in the RDM. We, as the sole general partner of the RDM, have the full, exclusive and complete right, power and discretion to operate, manage and control the affairs of the LLC and take certain actions necessary to maintain the LLC in good standing without the consent of the limited partners. RDM has entered into a license agreement with the Company indicating that while RDM builds custom machinery incorporating the Company’s hydrocarbon extraction technology, RDM will pay the Company a license fee of $500,000 per Remediation Processing Center manufactured. For the years ended December 31, 2019 and 2018, investors in RDM have a noncontrolling interest of $1,464,000 and none. We have the primary risk (expense) exposure in financing and operating the assets and are responsible for 100 percent of the operation, maintenance and any unfunded capital expenditures, which ultimately could be 100% of a custom machine, and the decisions related to those expenditures including budgeting, financing and dispatch of power. Based on all these facts, it was determined that we are the primary beneficiary of RDM. Therefore, RDM has been consolidated by the Company. Any intercompany revenue and expense associated with RDM and its license agreement with the Company has been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when acquired to be cash equivalents. As of December 31, 2019, and 2018, the Company does not have any cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. On December 31, 2019, and 2018, the Company had bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company annually evaluates the rating of the financial institutions in which it holds deposits.

Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimated allowance for doubtful accounts, if deemed necessary by management, and based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts, if any, by identifying troubled accounts and by using historical experience applied to an aging of accounts. An allowance for doubtful accounts was considered necessary by management as of December 31, 2019, and 2018 in the amounts of $21,000 and $9,000, respectively.

F-36

Equity Method Investments

Consolidated net income (loss) includes the Company’s proportionate net income or loss of equity investments. The carrying value of the Company’s equity method investments is increased and decreased by the Company’s proportionate share of the net income or loss of the investee. The carrying value of our equity method investment is also decreased by dividends the Company receives from the investee. For the years ended December 31, 2019 and 2018 the equity method investments consisted of the following:

As of December 31, 2019, the Company has an investment of $800,000 or 800,000,000 shares of common stock, or a diluted 23% equity holding in Scepter Holdings, Inc. (ticker: BRZL, OTC Markets). For the year ended December 31, 2019, Scepter Holdings, Inc. reported a net loss of $316,831, for which 23% was attributed to the Company in the amount of $72,871. There were no distributions to the Company in 2019 from Scepter Holdings, Inc. As of December 31, 2019 the net value of equity investment was $727,129. As of December 31, 2019 and 2018, the Company’s Chief Executive Officer has an immediate family member who is an officer of Scepter Holdings, Inc. The Company’s 800,000,000 shares of common stock of Scepter Holdings, Inc. has a market value of approximately $4,240,000 as of the date of December 11, 2020 based on the quoted market price.

As of December 31, 2019 and 2018 the Company held a 39% interest in Vivaventures Precious Metals, LLC for which the fair value of this investment is none. In July 2020, the Company withdrew from the LLC.

Cost Method Investments

Initial investments in equity securities are recorded at cost and subsequently adjusted to fair value if fair value is readily determinable; otherwise, the investment remains at cost. As of December 31, 2019, and 2018, the Company has a non-controlling interest in the following entities: Odyssey Group International, Inc. (approximately 2%), which is traded on the OTC Markets (ticker: ODYY) (see Note 5).

Convertible Instruments

Derivative Financial Instruments

Leases

F-37

We are the lessee in a lease contract when we obtain the right to control the asset. Operating lease right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on our consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of operations. We determine the lease term by assuming the exercise of renewal options that are reasonably certain. As most of our leases do not provide an implicit interest rate, we use our local incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. ASC 842 is effective for us beginning on January 1, 2019. As of December 31, 2019 we recorded right-of-use assets of $1,167,149 and lease obligations of $1,167,151. On adoption, we recognized additional liabilities, with corresponding ROU assets based on the present value of the lease payments over the lease term under current leasing contracts for existing operating leases. There was no statement of operations or cash flow statement impact on adoption, nor were prior periods adjusted.

The effects of the changes made to our balance sheet at adoption were as follows:

	Balance at December 31, 2018		Impact from ASU 2016-02 Adoption			Balance at January 1, 2019
Financial statement line item:
Right-of-use assets- operating leases	$	–	$	130,383		$	130,383
Current lease liabilities	$	–	$	(130,383	)	$	(130,383	)

Long Lived Assets

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

Property and equipment, net

Computers, software, and office equipment	1-5 years
Machinery and equipment	3-5 years
Vehicles	5 years
Furniture and fixtures	5 – 10 years
Precious metal extraction machinery (heavy extraction equipment)	10 years
Remediation Processing Centers (heavy extraction and remediation equipment) (“RPC”)	20 years
Leasehold improvements	Lesser of the lease term or estimated useful life

F-38

Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service.

Intangible Assets:

Share-Based Compensation

Income tax

F-39

Revenue Recognition

Effective January 1, 2018, we adopted Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). Revenue is recognized using the five-step model consistent with when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell products or complete services to our customers. Control of the products is transferred upon shipment to, or receipt at, our customers' locations, as determined by the specific terms of the contract. Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. Services are completed upon the terms of each contract, specifically in regard to remediation, when the tonnage of contaminated soil is completed and tested our performance obligation is completed and revenue is recognized. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables will generally be collected in less than six months, in accordance with the underlying payment terms.

Advertising Expense

Advertising costs are expensed as incurred. The Company did not have advertising expense for the years ended December 31, 2019 and 2018.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act, or the JOBS Act, we meet the definition of an “emerging growth company.”

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard.

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which improves Convertible Instruments and Contracts in an Entity’s Own Equity and is expected to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. We are currently evaluating the impact that ASU 2019-12 may have on our consolidated financial statements.

Net Income/Loss Per Share

Basic earnings per share is calculated by subtracting any preferred interest distributions from net income (loss), all divided by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method if their effect is dilutive. Potential dilutive instruments for the years ended December 31, 2019 and 2018 include the following: convertible notes payable convertible into approximately 160,688 and 108,281 shares of common stock, convertible Series A preferred stock convertible into approximately 20,000,000 shares of common stock (in the event of a public offering of the Company’s common stock this will convert to 25,000,000 shares), convertible Series B preferred stock convertible into approximately 21,251,890 and 67,271,587 shares of common stock, convertible Series B-1 preferred stock convertible into approximately 22,758,670 and 28,251,420 shares of common stock, convertible Series C-1 preferred stock convertible into approximately 13,384,760 and 12,117,160 shares of common stock, stock grants to employees of 500,000 and 600,000 shares of common stock, and warrants for 1,080,000 and 16,485,000 shares of common stock, and a stock payable of 20,000,000 shares of common stock.

F-40

Use of Estimates

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

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

Fair Value of Financial Instruments

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Note 4. Prepaid Expenses and Other Assets

As of December 31, 2019 and 2018, our prepaid expenses and other assets consist of the following:

	December 31,
	2019		2018
Prepaid on option to purchase land, net (a)	$	117,889	$	–
Deposits (b)		84,503		36,009
Total Prepaids and Other Assets	$	202,392	$	36,009

F-41

(a) The Company entered into an Option Agreement in July 2019 for the exclusive right to purchase certain real property commonly known as Asphalt Ridge. The right to purchase the land was purchased for $200,000, which would be applied as a payment on the land if the option is exercised to purchase the land. The agreement gives the Company 12 months for due diligence and to operate on the land. The agreement grants the Company the option to extend the option for an additional 6 months for a cost of $200,000. The Company capitalized the cost of legal expense for this option in the amount of $2,096 bringing the gross value of the option to $202,096 as of December 31, 2019. The Company amortized the prepaid over the life of the agreement, 12 months. For the year ended December 31, 2019 amortization expense of $84,207 was recorded. As of December 31, 2019 the net value of the asset is $117,889. In July 2020 the landowner agreed to amend the option agreement and extend the option for an additional 6 months at no cost to the Company.

(b) Various deposits with vendors or security deposits on office and warehouse leases.

Note 5. Investments

As of the years ended December 31, 2019, and 2018, the Company owns 2,500,000 shares of common stock in Odyssey Group International, Inc. (ticker: ODYY, OTC Markets), in the amount of $25,000. The Company has accounted for such securities at cost minus impairment due to the investment not being traded on an active market. For the years ended December 31, 2019 and 2018 there was no impairment.

During 2019, the Company converted $25,314 of its convertible note receivable with Odyssey Group International, Inc. into 2,531,400 shares of that entity’s common stock and transferred these shares to debt holders to extinguish outstanding notes payable (see Note 14).

As of December 31, 2019, and 2018, the Company owns 1,000 Class A LLC Units in each of the following entities, which are not consolidated: Vivaventures UTSI, LLC and Vivaventures Royalty II, LLC. In 2019 the Company purchased 1,000 Class A Units in Vivaopportunity Fund LLC. In aggregate these units amount to $3,000. These Class A Units give the Company management control of the entities but lack the necessary economics criterion, where the Company lacks the obligation to absorb losses of these entities, as well as the right to receive benefits from the LLCs.

The Company has accounted for such equity investments at cost minus impairment due to the investments not being traded in an active market.

Note 6. Inventories

Note 7. Precious Metal Concentrate

F-42

During the years ended December 31, 2019 and 2018, the Company carried a refining reserve of $1,183,229 against its precious metal concentrate asset based on estimates that the Company received if it were to sell the precious metal concentrate in its current concentrated form to processing refineries. The Company intends to refine our precious metal concentrate into dore bars for sale or monetization and investment purposes.

As of December 31, 2019 and 2018 the net realizable value of the precious metal concentrate is $1,183,228.

Note 8. Notes Receivable

Notes receivable consist of the following:

	December 31,
	2019		2018
Related party receivable (a)	$	2,202	$	–
Odyssey Group International, Inc. note receivable (b)		779,176		684,325
Scepter Holdings, Inc. note receivable (c)		63,514		–
Vivaceuticals, Inc. note receivable (d)		–		800,000
Total Notes Receivable	$	844,892	$	1,484,325

(a) In 2019, the Company loaned $2,202 to Vivaopportunity Fund, LLC., which holds a noncontrolling interest in our consolidated financial statements. The $2,202 is expected to be paid to the Company in the next nine months. The Company is not required to provide any subordinated support. No interest accrues, and no specific maturity date has been agreed upon.

(b) We entered into a Master Revolving Note with Odyssey Group International, Inc., (ticker: ODYY, OTC Markets) in January 2017 for the Company to lend up to $450,000 to the holder. The note accrues interest at a rate of 12.5% per annum and accrues monthly on the outstanding principal. The note was convertible into common shares of Odyssey Group International, Inc. at a rate of $0.01 per share and was amended in 2018 to convert all of its remaining convertible debt balance based on the next qualified offering of Odyssey Group International, Inc. of at least $500,000, and at the same price as the offering. The borrower is also required to pay a royalty to the Company at a rate of 2% of gross revenue until the loan is paid back in full. The loan was amended in November 2017 to extend the maturity date to lend up to $750,000 and it extended the maturity to January 2020. All outstanding principal and accrued interest was converted to the borrower’s common stock in June 2020 at $1.00 per share.

(c) We entered into a Master Revolving Note with Scepter Holdings, Inc. (OTC Pink: BRZL) in January 2019 for the Company to lend up to $70,000 to the holder. The note accrues interest at a rate of 7% per annum and accrues monthly on the outstanding principal. The note is convertible into common shares of Scepter Holdings, Inc. at a rate of $0.002 per share or a 50% discount to market on the date of conversion, whichever is less. The note matured in January 2020, and was amended to extend the maturity for an additional year with a maturity of January 2021 and the maximum amount of note was increased to $100,000.

F-43

(d) We entered into a Master Revolving Note with Vivaceuticals, Inc., a related party, in August 2012 for the Company to lend up to $3,000,000 to the holder. The note accrued interest at a rate of 12% per annum and accrued monthly on the outstanding principal. The Holder was also required to pay a royalty to the Company at a rate of 2% of gross revenue until the loan is paid back in full. The loan had a maturity of August 2017. At that time Vivaceuticals notified the Company that it was being approached by buyers of the assets that our loan encumbered. In December 2018, Vivaceuticals completed a sale of the assets to Scepter Holdings, Inc. for a fair value of the consideration received, or $800,000 of preferred shares in Scepter Holdings, Inc. In January 2019, Vivaceuticals transferred the $800,000 of preferred shares to the Company to extinguish outstanding balance and all accrued interest. In March 2019 the Company converted these preferred shares to common stock and became a 23% equity holder on a dilutive basis (see Note 3). As of December 31, 2019 and 2018 the outstanding balance of this note receivable with all accrued interest was none and $800,000.

Note 9. Property and Equipment,

The following table sets forth the components of the Company’s property and equipment at December 31, 2019 and December 31, 2018:

	December 31, 2019						December 31, 2018
	Gross Carrying Amount		Accumulated Depreciation		Net Book Value		Gross Carrying Amount		Accumulated Depreciation		Net Book Value

Office furniture and equipment	$	9,617	$	229	$	9,388	$	–	$	–	$	–
Vehicles		48,248		7,007		41,241		11,815		394		11,421
Precious metal extraction machine- 1 ton		2,280,000		228,000		2,052,000		2,280,000		228,000		2,052,000
Precious metal extraction machine- 10 ton		5,320,000		532,000		4,788,000		5,320,000		532,000		4,788,000

Construction in process:
Nanosponge prototype		17,103		–		17,103		14,103		–		14,103
Bioreactors		1,440,000		–		1,440,000		1,440,000		–		1,440,000
Remediation Processing Unit 1		4,983,731		–		4,983,731		3,571,347		–		3,571,347
Remediation Processing Unit 2		2,496,732		–		2,496,732		548,842		–		548,842
Remediation Processing Unit 3		97,353		–		97,353		43,306		–		43,306
Total fixed assets	$	16,692,784	$	767,236	$	15,925,548	$	13,229,413	$	760,394	$	12,469,019

For the year ended December 31, 2019 the Company paid $507,044 with 1,267,608 shares of Series C-1 Preferred Stock for equipment, which has been valued based on similar cash purchases of the Series C-1 Preferred Stock at $0.40 per share. For the years ended December 31, 2019 and 2018 our precious metal extraction machines were taken offline for design and implementation of further machinery additions and were not depreciated during this time. For the years ended December 31, 2019 and 2018 depreciation expense was $6,843 and $394. For the years ended December 31, 2019 and 2018 capitalized interest to equipment from debt financing was $1,061,215 and $551,382. Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into service.

Note 10. License Agreements

On August 17, 2017, the Company purchased rights to an exclusive license for the applications and implementations involving the Nanosponge Technology and to use and develop the Nanosponge as we see fit at our sole discretion. The Nanosponge contribution in the Company’s processes is to facilitate a cracking process whereby remediated or extracted oil may be further refined from a crude product to a diesel fuel. The license was valued at $2,416,572 and is amortized over its useful life of 20 years. As of December 31, 2019 and 2018 the accumulated amortization of the license is $281,933 and $161,105. For the years ended December 31, 2019 and 2018 amortization expense of the license was $120,828. Amortization expense for the years 2020 through 2024 is $120,828 in each respective year. As of December 31, 2019 and 2018 the net value of the license is $2,134,639 and $2,255,467.

F-44

Note 11. Intellectual Property, Net

The Company entered into a Contribution Agreement dated January 5, 2015, where proprietary information and intellectual property related to certain petroleum extraction technology (also known as hydrocarbon extraction technology) suitable to extract petroleum (or hydrocarbons) from tar sands and other sand-based ore bodies, and all related concepts and conceptualizations thereof (the “Extraction Technology”) was contributed to VivaVentures Energy Group, Inc., a 99% majority-owned subsidiary of Vivakor, and was assessed a fair market value of $16,385,157, which consists of the consideration of $11,800,000 and the Company assuming a deferred tax liability in the amount of $4,585,157. All ownership in the Extraction Technology (including all future enhancements, improvements, modifications, supplements, or additions to the Extraction Technology) was assigned to the Company and is currently being applied to the Company Remediation Processing Centers, which are the units that remediate material. The Extraction Technology is amortized over a 20-year life. As of December 31, 2019 and 2018 the amortization expense of the patents was $819,258. Amortization expense for the years 2020 through 2024 is $819,258 in each respective year. As of December 31, 2019 and 2018 the net book value of the Extraction Technology is $12,357,139 and $13,176,397.

In 2019, the Company began the process of patenting the Extraction Technology and all of its developments and additions since the acquisition, and we have filed a series of patents and capitalized the costs of these patents. As of December 31, 2019 the capitalized costs of these patents are $81,210. The patents are pending and when placed in service, the Company will be begin amortizing the cost over the patent useful life.

The Company entered into an asset purchase agreement dated September 5, 2017, where two patents (US patent number 7282167- Method and apparatus for forming nano-particles and US patent number 9272920- System and method for ammonia synthesis) were purchased and attributed a fair value of $4,931,380, which consists of the consideration of $3,887,982 and the Company assuming a deferred tax liability in the amount of $1,043,398. The patents grant the Company ownership of a nano catalyst technology that facilitates chemical manufacturing, with a focus on the production of ammonia, specifically for the gas phase condensation process used to create the iron catalyst. The nano catalyst accelerators make the Haber-Bosch process more efficient by increasing the active surface area of standard commercial iron catalysts, thereby lowering the reaction temperature and pressure required for the Haber-Bosch process to occur. As a result, less energy is needed to complete the reaction and create ammonia. The patents are amortized over their useful life of 10 years. As of December 31, 2019 and 2018 the amortization expense of the patents was $493,138. Amortization expense for the years 2020 through 2024 is $493,138 in each respective year. As of December 31, 2019 and 2018 the net book value of the patents is $3,821,820 and $4,314,958.

The following table sets forth the components of the Company’s intellectual property at December 31, 2019 and December 31, 2018:

	December 31, 2019						December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value

Extraction Technology patent costs	$	81,210	$	–	$	81,210	$	–	$	–	$	–
Extraction Technology		16,385,157		4,028,018		12,357,139		16,385,157		3,208,760		13,176,397
Ammonia synthesis patents		4,931,380		1,109,560		3,821,820		4,931,380		616,422		4,314,958
Total Intellectual property	$	21,397,747	$	5,137,578	$	16,260,169	$	21,316,537	$	3,825,182	$	17,491,355

Note 12. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	December 31,
	2019		2018
Accounts payable	$	422,551	$	155,086
Office access deposits		1,490		1,025
Accrued compensation		125,000		50,000
Accrued tax penalties and interest		161,411		118,262
Accounts payable and accrued expenses	$	710,452	$	324,373

As of December 31, 2019 and 2018 accounts payable attributed to variable interest entities was none and $161,415 and none.

F-45

Note 13. Stock Payable

As of December 31, 2019 and 2018, the Company had an outstanding payable of $11,800,000 payable in common stock to Sustainable Fuels, Inc. (“SFI”) for the Extraction Technology (See Note 11). Before the Common Stock was issued, the owner of SFI died and the matters and affairs of his estate were passed to the executor of his estate. We attempted to contact SFI and the executor of the estate multiple times to issue and send the common stock to the company or appropriate successor of the estate to no avail. The Company was able to make contact with new owner of SFI in 2020 and has since issued the Common Stock to SFI. In 2020, this liability has been extinguished with the issuance of the 20,000,000 shares of Common Stock.

Note 14. Loans and Notes Payable

Loans and Notes payable consist of the following:

	December 31,
	2019		2018
Various promissory notes and convertible notes (a)	$	80,212	$	749,464
Novus Capital Group LLC Note (b)		334,775		334,775
TriValley & Triple T Notes (c)		247,192		169,345
National Buick GMC (d)		31,966		–
Total Loans and Notes Payable	$	694,145	$	1,253,584

_____________

(a) In 2013 through 2018 the Company issued a series of promissory notes and convertible notes with various interest rates ranging up to 12% per annum. The convertible notes convert at the holder’s option after 1 year of issuance and may be converted into shares of common stock. The conversion price is generally equal to the specified per share conversion rate as noted in the note agreements. In 2018 a promissory note holder settled their debt and the remaining debt discount related to this promissory note was recorded as a loss on the extinguishment of the debt of $126,000 and charged to “Gain (loss) on extinguishment of debt” in the accompanying Consolidated Statement of Operations. In 2019 a series of the promissory note holders agreed to settle $632,850 in notes payable for 2,531,400 shares of marketable securities of Odyssey Group International, Inc. owned by the Company. The Company converted $25,314 of its convertible note receivable into 2,531,400 shares of Odyssey Group International, Inc. and transferred these shares to the note holders to extinguish the notes payable and has accounted for these marketable securities at cost or $25,314 and recorded a $607,536 gain on the extinguishment of debt in “Gain (loss) on extinguishment of debt” in the accompanying consolidated statement of operations.

(b) On September 5, 2017, the Company acquired patents in the amount of $3,887,982, in which the Company also agreed to assume the encumbering debt on asset in the amount of $334,775 due in December 2019 with no interest accruing until 2020. The Company has agreed with the Holder to extend the note to January 2, 2021 and accrue interest at 7% per annum commencing January 1, 2020 through July 1, 2020, and 10% per annum commencing July 2, 2020 through January 2, 2021.

(c) The balance of these outstanding notes is due to related parties, specifically the 51% owner of Vivakor Middle East LLC, in which the Company owns 49% and consolidates this entity in its consolidated financial statements. The loans were granted to Vivakor Middle East LLC by the majority owner for operational use with only the agreement of repayment from the net proceeds of the LLC operations once it commences scaled up operations. No interest accrues on the loans, and no specific maturity date has been agreed upon.

(d) In May 2019 the Company purchased a vehicle for $36,432 and financed $34,932 over six years with an interest rate of 6.24% per annum. Monthly payments of $485 are required and commenced in July 2019.

Note 15. Commitments and Contingencies

Leases

In June 2019, the Company entered into a sublease agreement with US Closer, LLC, whereby we agreed to lease approximately 12,061 square feet of office and manufacturing space located in South Salt Lake City, Utah. Pursuant to the Sublease, the sublease expires on December 31, 2020 and requires a monthly lease payment of $6,633.55 plus other pass-through expenses as required under the primary lease. The Company is currently negotiating with the landlord to renew this lease as the primary tenant and not as a sublease upon expiration of the lease.

F-46

The right-of-use asset for operating leases as of December 31, 2019 was $1,167,149. Rent expense for the years ended December 31, 2019 and 2018 was $241,131 and $220,074.

The following table reconciles the undiscounted cash flows for the leases as of December 31, 2019 to the operating lease liability recorded on the balance sheet:

2020	$	323,515
2021		276,699
2022		287,769
2023		299,466
2024		231,174
Total undiscounted lease payments		1,418,623
Less: Abatement of rents		(46,569	)
Less: Imputed interest		(200,602	)
Present value of lease payments	$	1,171,452
Operating lease liabilities, current	$	345,442
Operating lease liabilities, long-term	$	826,010
Weighted-average remaining lease term		4.5 years
Weighted-average discount rate		7.0%

The discount rate is the Company’s incremental borrowing rate, or the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on an assessment of the Company’s borrowings the incremental borrowing rate was determined to be 7%.

Note 16. Long-term Debt

To assist in funding the manufacture of the Company’s first two Remediation Processing Centers, between 2015 and 2017, the Company entered into two agreements which include terms for the purchase of participation rights for the sale of future revenue, and which also require working interest budget payments by the Company.

The Company accounts for the terms under these contracts for the sale of future revenue under Accounting Standards Codification 470 (“ASC 470”). Accordingly, these contracts include the receipt of cash from an investor where the Company agrees to pay the investor for a defined period a specified percentage or amount of the revenue or a measure of income (for example, gross revenue) according to their contractual right, in which the Company will record the cash as debt and apply the effective interest method to calculate and accrue interest on the contracts. The terms of these agreements grant the holder a prorated 25% participation in the gross revenue of the property as defined in the agreements for 20 years after operations commence for a purchase price of approximately $2,200,000. In the event that the contract is not fully subscribed by the LLCs it will receive only a prorated participation of the available 25% participation. Under the terms of the agreement, we anticipate Remediation Processing Centers to commence operations and to begin making estimated annual payments of $1,960,000, in January 2021 based on revenue projections of the RPCs.

F-47

In 2016 and 2017, additional consideration to investors to enter into these agreements was granted, and the Company issued to these investors 3,390,000 shares of Series B-1 Preferred Stock with a relative fair value of $0.25 per share or based on conversion terms and price of the Company’s Common Stock at the time of issuance. The Company also issued 3,185,000 common stock warrants to investors. The relative fair value of the warrants and Series B-1 preferred stock in aggregate was $1,488,550, and was recorded as a debt discount, which is amortized to interest expense over the term of these agreements using the effective interest method. During the manufacturing phase of the asset, the interest expense is capitalized to the asset.

Some holders of these participation rights also have the option to relinquish ownership and all remaining benefits of their LLC units in exchange for Common Stock in the Company. Depending on the contract, these options to convert to common stock range from between 1 and 5.5 years. The exercise period ranges from between 1 year to 5.5 years with a step-up discount to market for each year the option is not exercised with a range of between a 5% to a 25% discount to market Accordingly, under Accounting Standards Codification 815 (“ASC 815”) the Company valued these options at fair value using a Monte Carlo Simulation by a third-party valuation expert, which found the fair value of the options to be nominal. Long-term debt related to these participation rights is recorded in “Long-term debt” on the consolidated balance sheet.

As of December 31, 2019 and 2018 long-term debt related to the sale of future revenue was $3,900,923 and $2,355,659.

Long-term debt consists of the following:

	December 31, 2019			December 31, 2018
Principal	$	2,186,233		$	1,702,184
Accrued interest		1,971,285			924,954
Debt discount		(256,595	)		(271,479	)
Working interest payable		126,535			316,150
Total long term debt	$	4,027,458		$	2,671,809

Long term debt, current	$	126,535		$	316,150
Long term debt	$	3,900,923		$	2,355,659

F-48

The following table sets forth the payment schedule of long-term debt as of December 31, 2019:

	Principal		Interest		Total
2020	$	–	$	–	$	–
2021		2,338		1,955,213		1,957,551
2022		3,295		1,954,256		1,957,551
2023		4,643		1,952,908		1,957,551
2024		6,543		1,951,008		1,957,551
Thereafter		2,169,414		29,522,140		31,691,554
Total	$	2,186,233	$	37,335,525	$	39,521,758

Note 17. Stockholders' Equity

Series A, Series B, Series B-1, Series C and Series C-1 Preferred Stock

The Preferred Stock authorized by the Company may be issued from time to time in one or more series. The Company is authorized to issue 450,000,000 shares of preferred stock. The Company is authorized to issue 2,000,000 shares of Series A Preferred Stock, 98,000,000 shares of Series B Preferred Stock, 50,000,000 shares of Series B-1 Preferred Stock, 100,000,000 shares of Series C Preferred Stock, and 50,000,000 shares of Series C-1 Preferred Stock. The Board of Directors is authorized to fix or alter the number of shares constituting any series of Preferred Stock and the designation thereof.

The Company has issued 2,000,000 shares of Series A Preferred Stock. Shares are convertible at a current ratio of 10 shares of Common Stock for each outstanding share of Series A Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. Holders of shares of Series A Preferred Stock will have the right to 25 votes for each share of Common Stock into which such shares of Series A Preferred Stock can then be converted (with a current conversion ratio of 10 shares of Common Stock for each outstanding share of Series A Preferred Stock) and the right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any other Preferred Stock holder in the liquidation, dissolution or winding up of our Company. As of December 31, 2019 and 2018 the liquidation preference is $400,000. Holders of shares of Series A Preferred Stock are not currently entitled to dividends. The Company has the right, but not the obligation, to redeem shares of Series A Preferred Stock.

The Company has issued 21,251,890 and 67,271,587 of Series B Preferred Stock as of December 31, 2019, and 2018, respectively. Shares of Series B Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.20) or a 10% discount to market on the conversion date). Also, automatic conversion of shares of Series B Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series B Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. Certain holders of Series B contractually agreed to an automatic conversion to Common Stock after 4 years of issuance. The Company has the right, but not the obligation, to redeem shares of Series B Preferred Stock one year after issuance. Holders of Series B Preferred Stock will have the right to one vote for each share of Common Stock into which such Series B Preferred Stock is then convertible, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series A Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of December 31, 2019 and 2018 the liquidation preference was $4,383,202 and $13,874,764. Dividends are 12.5% and cumulative and are payable only when, as, and if declared by the Board of Directors.

F-49

The Company has issued 22,758,670 and 28,251,420 of Series B-1 Preferred Stock as of December 31, 2019, and 2018, respectively. Shares of Series B-1 Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.25) or a 10% discount to market on the conversion date). Also, automatic conversion of shares of Series B-1 Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series B-1 Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series B-1 Preferred Stock one year after issuance. Holders of Series B-1 Preferred Stock have no voting or dividend rights, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series A and Series B Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of December 31, 2019 and 2018 the liquidation preference was $5,689,668 and $7,062,855.

The Company has not issued any Series C Preferred Stock as of December 31, 2019, and 2018, respectively. Shares of Series C Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.35) or a 10% discount to the market price on the conversion date). Automatic conversion of shares of Series C Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series C Preferred Stock, or upon the four (4) year anniversary date of the issuance of such shares. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series C Preferred Stock one year after issuance. Holders of Series C Preferred Stock will have the right to one vote for each share of Common Stock into which such Series C Preferred Stock is then convertible, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series B and B-1 Preferred Stock, in the liquidation, dissolution or winding up of our Company. Dividends are 12.5% and cumulative and are payable only when, as, and if declared by the Board of Directors.

The Company has issued 13,384,760 and 12,117,160 of Series C-1 Preferred Stock as of December 31, 2019, and 2018, respectively. Shares of Series C-1 Preferred Stock are convertible one year after issuance, at any time at the option of the holder, into shares of Common Stock (with a conversion price at the lesser of the issuance price ($0.40) or a 10% discount to the market price on the conversion date). In addition, automatic conversion of shares of Series C-1 Preferred Stock into shares of Common Stock may occur due to certain qualified public offerings entered into or by written consent of a majority of the holders of Series C-1 Preferred Stock. The conversion price is subject to adjustment under certain customary circumstances, including as a result of stock splits and combinations, dividends and distributions, and certain issuances of common stock. The Company has the right, but not the obligation, to redeem shares of Series C-1 Preferred Stock one year after issuance. Holders of Series C-1 Preferred Stock have no voting or dividend rights, and a right to a liquidation preference in any distribution of net assets made to the shareowners prior to and in preference to the holders of Common Stock and any Preferred Stock holder, except holders of Series A, Series B, Series B-1, and Series C Preferred Stock, in the liquidation, dissolution or winding up of our Company. As of December 31, 2019 and 2018 the liquidation preference was $5,353,904 and $4,846,864.

For the year ended December 31, 2019, the Company issued 1,980,126 shares of Series B-1 Preferred Stock as a $495,054 stock dividend paid to Series B Preferred Shareholders.

For the year ended December 31, 2019, $11,072,019, or 53,492,573 shares of Series B and Series B-1 Preferred Stock, were converted into 53,492,583 shares of Common Stock.

F-50

For the year ended December 31, 2019, the Company issued 1,267,608 Series C-1 Preferred Stock for $507,044 for the purchase of equipment.

For the year ended December 31, 2018, the Company issued 5,767,126 shares of Series B-1 Preferred Stock as a $1,441,938 stock dividend paid to Series B Preferred Shareholders.

For the year ended December 31, 2018, the Company issued 90,000 shares of Series C-1 Preferred Stock for $36,900 in cash.

For the year ended December 31, 2018, the Company issued 768,160 shares of Series C-1 Preferred Stock as a $307,265 interest expense payment.

For the year ended December 31, 2018, $1,239,382, or 5,840,561 of Series B and B-1 Preferred Stock, was converted into 5,840,560 shares of Common Stock.

For the year ended December 31, 2018, the Company issued 9,000 Series C-1 Preferred Stock for $2,700 in services.

Common Stock

The Company is authorized to issue 1,250,000,000 shares of common stock. As of December 31, 2019 and 2018, there were 285,343,964 and 230,256,188 shares of our common stock issued and outstanding, respectively. Treasury stock is carried at cost.

For the year ended December 31, 2019, $11,072,019, or 53,492,573 shares of Series B and Series B-1 Preferred Stock, were converted into 53,492,583 shares of Common Stock.

For the year ended December 31, 2019, the Company issued 209,414 shares for a $53,500 reduction of liabilities.

For the year ended December 31, 2019, the Company issued 230,000 shares of Common Stock for $91,982 in cash due to exercised warrants.

For the year ended December 31, 2019, the Company issued 1,155,779 shares of Common Stock for $219,597 for services to the Company.

For the year ended December 31, 2019, the Company granted stock-based compensation to an employee, including a 500,000 share stock award, which vests after 4 years. For the year ended December 31, 2018, stock-based compensation was $48,421.

For the year ended December 31, 2018, $1,239,382, or 5,840,561 shares of Series B-1 Preferred Stock, was converted into 5,840,560 shares of Common Stock.

For the year ended December 31, 2018, the Company issued 3,005,630 shares of Common Stock for a $751,408 conversion of outstanding notes payable.

For the year ended December 31, 2018, the Company issued 130,000 shares of Common Stock for $51,999 in cash due to exercised warrants.

For the year ended December 31, 2018, the Company issued stock-based compensation to employees, including a 600,000 share stock award, which vest between 1 and 4 years. For the year ended December 31, 2018, stock-based compensation was 32,280.

Noncontrolling Interest

For the years ended December 31, 2019 and 2018, the Company issued 292,800 and no units of noncontrolling interest in RPC Design and Manufacturing LLC for cash of $1,464,000 and none.

F-51

Note 18. Temporary Equity

Each of the Series B, B-1, C and C-1 convertible preferred stock have conversion features that allow the holder to convert the preferred stock into common stock at such holder’s election. Upon conversion, the Company may be required to deliver a variable number of equity shares that is determined by using a formula based on the market price of the Company’s Common Stock. After four years from the date of issuance, Series B and C preferred shareholders are forced to automatically convert to Common Stock. For each respective series, the holder may convert their preferred shares to common shares at the original issue price as defined, which ranges from between $0.20 per share to $0.40 per share, at the lesser of the original issue price or 90% of the market price on the conversion date. As of December 31, 2019 and 2018 the market price of the Company’s Common Stock was $0.20 and $0.23 per share. As of the date of this report the market price of the shares is approximately $0.53 per share. There is no contractual cap on the number of common shares that the Company could be required to deliver on preferred shareholders’ conversions to Common Stock. Because the feature contains no explicit share limit, the Company assumes that it may be forced to cash settle the conversion feature in accordance with the accounting analysis under ASC 815-40-25.

Accordingly, under ASC 815-40-25-10 the Company may be forced to settle these conversion features in cash, specifically since it is unknown as to what date the shareholders’ may convert their preferred stock to common stock and if there will be sufficient authorized and unissued common shares on that date. As of December 31, 2019 and 2018 the Company did have sufficient authorized and unissued common shares to satisfy all preferred shareholders interest if it were converted to Common Stock, although if the stock price were to drop below $0.02 per share and the Company could not authorize further shares it may be forced to settle such conversions in cash. Accordingly, Series B, B-1, C and C-1 preferred stock has been classified in temporary equity.

The following table shows all changes to temporary equity for the years ended December 31, 2019 and 2018:

Convertible Preferred Stock

	Series B						Series B-1						Series C-1
	Shares			Amount			Shares			Amount			Shares		Amount
December 31, 2017		71,689,877		$	14,337,913			23,906,565		$	5,976,566			11,250,000	$	5,987,500

Conversion of Series B and B-1 Preferred Stock to Common Stock		(4,418,290	)		(883,658	)		(1,422,271	)		(355,724	)		–		–
Interest expense payment on long term debt		–			–						–			768,160		307,265
Preferred stock issued for services		–			–						–			9,000		2,700
Issuance of preferred stock for cash		–			–						–			90,000		36,900
Dividend paid in Series B-1 Preferred Stock		–			–			5,767,126			1,441,938					–

December 31, 2018		67,271,587		$	13,454,255			28,251,420		$	7,062,780			12,117,160	$	6,334,365

Conversion of Series B and B-1 Preferred Stock to Common Stock		(46,019,697	)		(9,203,875	)		(7,472,876	)		(1,868,144	)		–		–
Common Stock issued for the purchase of equipment		–			–			–			–			1,267,600		507,044
Dividends to preferred stockholders		–			–			1,980,126			495,054			–		–
December 31, 2019		21,251,890		$	4,250,380			22,758,670		$	5,689,690			13,384,760	$	6,841,409

Note 19. Warrants

As of December 31, 2019 the Company had 1,080,000 warrants outstanding. These warrants relate to the warrants issued as an incentive to investors with an investment into the Company. As of December, 31 2018 the Company had 16,485000 warrants outstanding, where 5,625,000 these warrants related to warrants issued for incentive to investors with their investment into the Company, and 11,000,000 of the outstanding warrants were issued in the acquisition of the ammonia synthesis patents and equipment in 2017. The outstanding warrants were issued at prices ranging from $0.40 to $1.00 per share of Common Stock. The warrants were granted for periods ranging from three to ten years.

F-52

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrants on the date of issuance are as follows:

Risk-free interest rate			1.3% - 2.7%
Expected dividend yield			None
Expected life of warrants			1 – 2 years
Expected volatility rate			73 - 131%

The following table summarizes the activity of the Company’s share purchase warrants:

				Weighted
				average		Aggregate
	Number of			exercise		Intrinsic
	warrants			price		Value
Balance, January 1, 2018		26,267,500		$	0.68
Issued		50,000			0.40
Expired		(9,702,500	)		0.91
Exercised		(130,000	)		0.40
Balance, December 31, 2018		16,485,000			0.55	$	–
Expired		(15,195,000	)		0.56
Exercised		(210,000	)		0.40
Balance, December 31, 2019		1,080,000		$	0.40	$	–

As of December 31, 2019, the following share purchase warrants were outstanding:

Number of warrants outstanding		Exercise price				Expiration date
1,080,000		$	0.40			December 2020

Note 20. Income Tax

Provision (benefit) for income tax expense consists of the following:

	December 31,
	2019		2018
Current:
State	$	800	$	800
		800		800
Deferred:
Federal		422,037		(14,654	)
State		166,366		(22,791	)
		588,403		(37,445	)

Net provision (benefit)	$	589,203	$	(36,645	)

F-53

The differences between the expected income tax benefit based on the statutory Federal United States income tax rates and the Company's effective tax rates are summarized below for the years ended December 31, 2019 and 2018:

	December 31, 2019
Tax Computed At The Federal Statutory Rate	$	(344,301	)	21.00%
State Tax, Net Of Fed Tax Benefit		(100,906	)	6.15%
Nondeductible Expenses		3,405		-0.21%
Flowthrough Entity not Subject to Tax		21,313		-1.30%
Foreign Corporation - Minority Interest		14,251		-0.87%
Valuation Allowance		995,440		-60.72%
Rate Change		–		0.00%
R&D Credits		–		0.00%
Other/Prior Year True-Up		–		0.00%
Provision for income taxes	$	589,203		-35.95%

	December 31, 2018
Tax Computed At The Federal Statutory Rate	$	(461,191	)	21.00%
State Tax, Net Of Fed Tax Benefit		(148,545	)	6.76%
Nondeductible Expenses		3,302		-0.15%
Flowthrough Entity not Subject to Tax		–		0.00%
Foreign Corporation - Minority Interest		9,306		-0.42%
Valuation Allowance		560,483		-25.52%
Rate Change		–		0.00%
R&D Credits		–		0.00%
Other/Prior Year True-Up		–		0.00%
Benefit from income taxes	$	(36,645	)	1.67%

Significant components of the Company's deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

	December 31, 2019
Reserves	$	336,987
Fixed Assets		(1,711,017	)
Leases		1,204
Intangibles		(4,301,036	)
Net Operating Losses		2,819,624
Impairment Losses		–
Accruals		46,508
Other		21,400
Net Deferred Liability		(2,786,330	)
Less: Valuation Allowance		2,916,421
Total deferred tax liability:	$	(5,702,751	)

	December 31, 2018
Reserves	$	333,629
Fixed Assets		(1,477,724	)
Leases		–
Intangibles		(4,665,918	)
Net Operating Losses		1,886,112
Impairment Losses		710,389
Accruals		19,304
Other		840
Net Deferred Liability		(3,193,368	)
Less: Valuation Allowance		1,920,980
Total deferred tax liability:	$	(5,114,348	)

F-54

In determining the possible future realization of deferred tax assets, the Company has considered future taxable income from the following sources: (a) reversal of taxable temporary differences; and (b) tax planning strategies that, if necessary, would be implemented to accelerate taxable income into years in which net operating losses might otherwise expire.

Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. Based on our review of the deferred tax assets the Company has concluded that a valuation allowance is necessary on the net operating loss balance, as realization of this asset does not meet the more likely than not threshold.

As of December 31, 2019 the Company had estimated net operating losses for federal and state purposes of $11.7 million and $5.2 million, respectively. Federal and state net operating losses will begin to expire in 2028.

We recognize a tax position as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize potential interest and penalties related to unrecognized tax benefits in the general and administrative expense in the statement of operations of the Company.

The Company is in the process of filing back income tax returns from 2010 through the current year and subject to IRS examination for these year. The Company has booked a reserve for potential penalties associated with non-filing of certain foreign information reports related to its subsidiary in the Middle East. Penalties and interest have been reported in the general and administrative section of the statement of operations. The reserve balance at December 31, 2019 and 2018 was $156,000 and $113,000, respectively. The Company does not expect this reserve to reverse within the next 12 months, as they will apply for a penalty waiver when the tax returns are ultimately filed. Due to the non-filing of income tax returns, statutes of limitations on the potential examination of those income tax periods will continue to run until the returns are filed, at which time the statutes will begin. The Company expects to file all past due income tax returns within the next 12 months.

Note 21. Related Party Transactions

The Company provided secured loan financing and assistance to the development and commercialization of two bioactive beverages and one weight loss beverage for Vivaceuticals, Inc., which shared a common officer and board of director member with the Company. Vivaceuticals sold its assets to Scepter Holdings, Inc. in 2018. In 2019, the Company received 800,000 shares of preferred stock in Scepter Holdings, Inc. to extinguish the loan encumbering the assets. The Company has converted these preferred shares into 800,000,000 shares of Common Stock of Scepter Holdings, Inc., which is traded on the OTC Markets (ticker: BRZL) (see Note 3). As of December 31, 2019 and 2018, the Company’s Chief Executive Officer has an immediate family member who is an officer of Scepter Holdings, Inc.

The Company has a consulting contract with Vivaventures Precious Metals, LLC, which is majority owned by an employee of the Company. For the years ended December 31, 2019 and 2018 the Company paid Vivaventures Precious Metals LLC $290,000 and $514,000 for consulting services rendered.

The Company has a consulting contract with LBL Professional Consulting, Inc. (“LBL”), which shares a common officer with the Company. For the years ended December 31, 2019 and 2018 the Company paid LBL $231,199 and $180,544 for a team of consultants serving the Company. In September 2020, the Company granted non-statutory stock options to LBL for 30,000,000 shares of Common Stock. As of December 17, 2020 the parties have agreed to amend the contract to reduce the stock options to purchase 10,000,000 shares of common stock. The stock options vest over four years. The stock option is exercisable up to ten years from the grant date. The common officer is not the beneficiary of the Company and is not permitted to participate in any discussion, including the LBL’s board meetings, regarding any Company stock that LBL may own at any time.

The Company has a note payable to TriValley and Triple T, which is owned by the 51% majority-owner of Vivakor Middle East LLC. As of December 31, 2019 and 2018 the balance owed was $247,192 and $169,345 (See Note 14).

The Company has a common board of directors member with CannaPharmaRx Inc. As of December 31, 2019 and 2018, the Company has a $21,000 and $9,000 account receivable with CannaPharmaRx Inc. for leasing office space to this entity. As of December 31, 2019 and 2018, Company recorded an allowance for doubtful accounts on these receivables in the amount of $21,000 and $9,000.

F-55

Note 22. Subsequent Events

The Company has evaluated subsequent events through November 6, 2020.

In February 2020 we entered into a letter of intent to develop a cavitation technology licensed by BGreen LLC that has been tested at the University of Utah and been shown to increase the API of hydrocarbons. This technology is in development phase and intent is to work with BGreen LLC to develop the technology to a commercial state with our hydrocarbon extraction technology.

In April 2020 through August 2020 the Company entered into convertible promissory notes with a principal amount of $308,000. The notes accrue interest at 10% per annum and have a maturity of the earlier of 12 months or the consummation of the Company listing its Common Stock on a senior stock exchange. The notes are convertible into shares of the Company’s common stock at the option of the Company and at a price equal to 80% of the opening price of the Company’s common stock on the national exchange or the offering price paid by the investors in the financing in connection with the uplist, whichever is lower, or (ii) repaid in cash in an amount equal to the indebtedness being repaid plus a premium payment equal to 15% of the amount being repaid. If an event of default has occurred and the Company does not convert the amounts due under the Note into the Company’s common stock, then the Company shall have the option to convert the outstanding indebtedness into shares of the Company’s common stock at a price equal to 80% of the weighted average trading price of the Company’s common stock on the OTC Markets, or be repaid in cash in an amount equal to all principal and interest due under the Note.

In April 2020, the Company ordered equipment under a licensing agreement with solvAQUA Inc., a Canadian based clean water technology company. The technology allows for the remediation of oil and solids contaminated water, leaving both clean water and usable oil/solids byproduct. The delivery of the equipment has been delayed, and we anticipate delivery and installation in 2020. New payment terms are being negotiated due to these delays.

On May 15, 2020, the Company entered into a settlement agreement with Vivaventures Precious Metals, LLC, where the Company disputed the amount of precious metals it was owed from the LLC who was also the custodian. After performing an observation of the precious metals, it was discovered in 2019 that there was a material discrepancy in the amount of materials the LLC had on hand. Whereby the parties agreed that the Company would receive approximately 75% of the total amount of precious metals on hand and being held by the LLC, rather than 59% as previously agreed resulting in the same amount of holdings for the Company over the years. Additionally, the parties agreed to release each other from further claims and that the Company would become the custodian of the precious metals.

On May 20, 2020, the Company entered into a loan agreement with Blue Ridge Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program in an amount of $205,100. The loan carried an annual interest rate of one (1) percent per annum with payment beginning in the seventh month with monthly payments required until maturity in the 18^th month. The loan may be fully forgivable according to the CARES Act, if the Company can provide proper documentation and accordingly the payout schedule has not been disclosed

On May 22, 2020, RPC Design and Manufacturing LLC entered into a loan agreement with the SBA in an amount of $150,000 having an interest rate of 3.75% per annum. Monthly payments of $731 will be required beginning in month 12 and the loan shall mature in 30 years.

In June 2020, the Company entered into operations in Utah using Remediation Processing Center #2. No products have been sold, nor revenue generated.

F-56

In June 2020, the Company amended the note receivable and agreed to converted its outstanding loan and all accrued interest due from Odyssey Group International, Inc. (ticker: ODYY, OTC Markets), in an amount of $809,577 into 809,578 shares of Odyssey Group International, Inc.’s common stock.

In July 2020, the Company withdrew from Vivaventures Precious Metals, LLC and is not entitled to receive any further distributions from the LLC.

In July 2020, the Company amended the Option Agreement with the landowner for the exclusive right to purchase certain real property commonly known as Asphalt Ridge to grant the Company an extension of the option for six months at no cost to the Company.

In July 2020, the Company entered into a Paycheck Protection Program loan agreement with JP Morgan Chase Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program, in an amount of $90,645. The loan carries an annual interest rate of one (1) percent per annum with payment beginning in the seventh month with monthly payments required until maturity in the 18^th month.

On August 6, 2020, the Company entered into a loan agreement with the SBA in an amount of $150,000 having an interest rate of 3.75% per annum. Monthly payments of $731 will be required beginning in month 12 and the loan shall mature in 30 years.

In September 2020, the Company granted non-statutory stock options to LBL Professional Consulting, Inc. for 30,000,000 shares of Common Stock. As of December 17, 2020 the parties have agreed to amend the contract to reduce the stock options to purchase 10,000,000 shares of common stock. The stock options vest over four years. The stock option is exercisable up to ten years from the grant date.

In September 2020, the Company entered into an Employment Agreement with Matthew Nicosia to serve as our Chief Executive Officer. The agreement provides for an annual salary of $50,000. The Employment Agreement has a term of three years and automatically extends for successive one-year periods unless terminated by the Company or Mr. Nicosia, with three months written notice required. The agreement provides for annual increases upon the occurrence of specific performance metrics, and provides that the Company shall grant Mr. Nicosia options to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price equal to 110% of the fair market value of the Company’s Common Stock on the date of grant. The agreement also provides for an annual bonus of up to 100% of Mr. Nicosia’s then base salary upon the achievement of performance goals established and approved by the Board of Directors. The agreement entitles Mr. Nicosia to receive various employee benefits generally made available to other officers and senior managers of the Company.

In September 2020, the Company entered into an Employment Agreement with Tyler Nelson to serve as our Chief Financial Officer. The agreement provides for an annual salary of $50,000. The Employment Agreement has a term of three years and automatically extends for successive one-year periods unless terminated by the Company or Mr. Nelson, with three months written notice required. The agreement provides for annual increases upon the occurrence of specific performance metrics. The agreement also provides for an annual bonus of up to 100% of Mr. Nelson’s then base salary upon the achievement of performance goals established and approved by the Board of Directors. The agreement entitles Mr. Nelson to receive various employee benefits generally made available to other officers and senior managers of the Company.

In September 2020, the Company agreed with the Novus Capital LLC to extend the note payable to January 2, 2021 and accrue interest at 7% per annum commencing January 1, 2020 through July 1, 2020, and 10% interest per annum commencing July 2, 2020 through January 2, 2021.

F-57

In 2020, 11,657,398 shares of Series B Preferred Stock, 4,662,533, shares of Series B-1 Preferred Stock, and 668,939 shares of Series C-1 Preferred Stock, for an aggregate of 3,764,688, were converted into 18,285,200 shares of Common Stock.

In 2020, the Company issued 691,182 shares of Series B-1 Preferred Stock as a $172,796 stock dividend paid to Series B Preferred Shareholders.

In 2020 the Company issued 20,000,000 shares of Common Stock for a $11,800,000 reduction in stock payables.

In 2020 the Company issued 228,000 shares of Common Stock in the amount of $41,028 was issued for cash.

F-58

Shares

Common Stock

Vivakor, Inc.

____________________________________

PROSPECTUS

____________________________________

, 2021

Through and including , 2021 (the 25^th day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than underwriting discounts and commissions, to be paid by the Registrant in connection with the issuance and distribution of the common stock being registered. All amounts other than the SEC registration fee and FINRA fee are estimates.

SEC Registration Fee	$	1,587.41
FINRA Filing Fee		2,699.38
Listing Fee			*
Printing and Engraving Expenses			*
Legal Fees and Expenses			*
Accounting Fees and Expenses			*
Transfer Agent Fees			*
Miscellaneous			*
Total	$	*

* To be completed by amendment.

Item 14. Indemnification of Officers and Directors

The Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors. Our Bylaws include provisions that require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer of our Company. We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors, officers, employees and agents for certain liabilities. Our Amended and Restated Articles of Incorporation do not contain any limiting language regarding director immunity from liability.

Item 15. Recent Sales of Unregistered Securities.

The following sets forth information regarding all unregistered securities sold by us in transactions that were exempt from the requirements of the Securities Act in the last three years. Except where noted, all of the securities discussed in this Item 15 were all issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

2020

On November 4, 2020, the Company issued 100,000 shares of common stock at $0.44 per share pursuant to a convertible promissory note.

On November 4, 2020, the Company issued 300,000 shares of common stock at $0.40 per share for $121,230 in services.

On April 21, 2020, the Company issued 20,000,000 shares of common stock pursuant to a contribution agreement at a price of $0.59.

On April 13, 2020, the Company issued 60,000 shares of common stock to investors at $0.3198 per share for cash proceeds of $19,188.

On January 27, 2020, the Company issued 168,000 shares of common stock to investors at $0.13 per share for cash proceeds of $21,840.

From January 1, 2020 through December 9, 2020, the Company issued 691,182 shares of Series B-1 Preferred Stock as a $172,795 stock dividend paid to Series B Preferred Shareholders at a price of approximately $0.25 per share.

From January 1, 2020 through December 9, 2020, the Company issued 15,505,438 shares of common stock for $2,896,380 for the conversion of 14,481,898 shares of Series B Preferred Stock, at an average price of approximately $0.20 per share.

From January 1, 2020 through December 9, 2020, the Company issued 8,576,203 shares of common stock for $2,084,044 for the conversion of 8,336,177 shares of Series B-1 Preferred Stock, at an average price of approximately $0.25 per share.

II-1

From January 1, 2020 through December 9, 2020, the Company issued 5,740,128 shares of common stock for $2,685,226 for the conversion of 5,707,364 shares of Series C-1 Preferred Stock, at an average price of approximately $0.40 per share.

2019

On December 31, 2019, the Company issued 1,155,779 shares of common stock to a consultant for market services valued at $219,597 at a price of $0.19 per share.

On December 18, 2019, the Company issued 539,373 shares of Series C-1 Preferred Stock at $0.40 per share for the purchase of equipment valued at $215,749.

On December 16, 2019 the Company issued 32,931 shares of Series C-1 Preferred Stock at $0.40 per share for the purchase of equipment valued at $13,172.

On July 11, 2019 the Company issued 695,304 shares of Series C-1 Preferred Stock at $0.40 per share for the purchase of equipment valued at $278,122.

From January 1, 2019 through December 31, 2019, the Company issued 1,980,126 shares of Series B-1 Preferred Stock as a $495,054 stock dividend paid to Series B Preferred Shareholders at a price of $0.25 per share.

From January 1, 2019 through December 31, 2019, the Company issued 46,019,697 shares of common stock for $9,203,875 for the conversion of 46,019,697 shares of Series B Preferred Stock, at an average price of $0.20 per share.

From January 1, 2019 through December 31, 2019, the Company issued 7,472,876 shares of common stock for $1,868,144 for the conversion of 7,472,876 shares of Series B-1 Preferred Stock, at an average price of $0.25 per share.

From January 1, 2019 through December 31, 2019, the Company issued 209,414 shares for a $53,500 reduction of liabilities pursuant to conversion of promissory notes at an average price of $0.25 per share.

From January 1, 2019 through December 31, 2019, the Company issued 230,000 shares of common stock for $91,982 in cash for the exercise of 230,000 warrants at an average price of $0.40 per share.

2018

On December 12, 2018, the Company issued 768,160 shares of Series C-1 Preferred Stock to 57 investors valued at $0.40 per share for aggregate proceeds of $307,165 which was recorded as interest payable on behalf of an affiliate.

On June 4, 2018, the Company issued 90,000 shares of Series C-1 Preferred Stock to an investor at $0.40 per share for cash proceeds of $36,000.

One June 4, 2018, the Company issued 9,000 shares of Series C-1 Preferred Stock at $0.40 per share for services valued at $2,700.

From January 1, 2018 through December 31, 2018, the Company issued 5,767,126 shares of Series B-1 Preferred Stock as a $1,441,938 stock dividend paid to Series B Preferred Shareholders at a price of $0.25 per share.

From January 1, 2018 through December 31, 2018, the Company issued 4,418,290 shares of common stock for $883,658 pursuant to the conversion of 4,418,290 shares of Series B Preferred Stock at an average price of $0.20 per share.

From January 1, 2018 through December 31, 2018, the Company issued 1,422,271 shares of common stock for $355,724 pursuant to the conversion of 1,422,271 shares of Series B-1 Preferred Stock, at an average price of $0.25 per share.

From January 1, 2018 through December 31, 2018, the Company issued 3,005,630 shares of common stock for a $751,408 reduction of liabilities pursuant to conversion of promissory notes at an average price of $0.25 per share.

From January 1, 2018 through December 31, 2018, the Company issued 130,000 shares of Common Stock for $51,999 in cash pursuant to the exercise of 130,000 warrants at $0.40.

II-2

Item 16. Exhibits and Financial Statement Schedules

The following exhibits are filed with this Registration Statement:

Exhibit Number		Exhibit Description

1.1*		Form of Underwriting Agreement
3.1 (1)		Amended and Restated Articles of Incorporation
3.2 (1)		Amended and Restated Bylaws
3.3 (1)		Amendment to Amended and Restated Articles of Incorporation
3.4*		Second Amendment to Amended and Restated Articles of Incorporation
3.5*		Second Amended and Restated Articles of Incorporation
4.1*		Form of Representative Warrant
4.2		Form of Convertible Promissory Note (2013)
4.3		Form of Convertible Promissory Note
4.4		Payroll Protection Program Loan, with Chase Bank
4.5		Payroll Protection Program Loan, with Blue Ridge Bank
4.6		Small Business Association Loan
5.1*		Opinion of Lucosky Brookman LLP
10.1 (1)		Form of Amended Contribution Agreement between Sustainable Fuels Incorporated and Vivakor, Inc. dated as of June 15, 2016
10.2 (1)		Project Charter between SolvAQUA Inc. and Vivakor, Inc. dated April 9, 2020
10.3 (1)		Letter of Clarification from SolvAqua, Inc. to Vivakor, Inc. dated July 15, 2020
10.4 (1)		Intellectual Property License Agreement by and between BGreen, LLC and Vivakor, Inc. dated as of September 30, 2020
10.5 (1)		Patent and Intellectual Property License Agreement by and between CSS Nanotech, Inc. and Vivakor, Inc. dated as of July 22, 2020
10.6 (1)		Employment Agreement by and between Vivakor, Inc. and Matthew Nicosia
10.7 (1)		Employment Agreement by and between Vivakor, Inc. and Tyler Nelson
10.8*		Vivakor, Inc. 2020 Stock Incentive Plan
10.9*		Form of Director Agreement
10.10		Sub-contract Agreement for Remediation of oily sludge material in KOC SEK Fields
10.11		Sub-contract Agreement for Remediation of oily sludge material in KOC SEK Fields – Sub-contract No. 01-2018
10.12		Option Agreement
10.13		First Amendment to Option Agreement
10.14		Second Amendment to Option Agreement
10.15		Intellectual Property Agreement by and between VivaVentures Precious Metals, LLC and Vivakor, Inc.
10.16		Operating Agreement VV UTSI
10.17		Restated Working Interest Agreement by and between VivaVentures Energy Group, Inc. and VivaVentures UTSI, LLC
10.18		Amendment No. 1 to Amended and Restated Working Interest Agreement by and between VivaVentures Energy Group, Inc. and VivaVentures UTSI, LLC
10.19		Operating Agreement VV RII
10.20		Restated Working Interest Agreement by and between VivaVentures Energy Group, Inc. and VivaVentures Royalty II
10.21		Articles of Association of Vivakor Company
10.22		LLC Agreement of IMX
10.23		LLC Agreement of RPC Design
10.24		LLC Agreement of Viva Wealth
10.25		LLC Agreement of VOF
10.26		Agreement Regarding Assets
10.27		Amendment to Agreement
21.1 (1)		List of Subsidiaries
23.1		Consent of Hall & Company, Independent Registered Public Accounting Firm
23.2		Consent of Lucosky Brookman LLP (included in Exhibit 5.1)
24.1		Power of Attorney (included in signature page)

____________

to be filed by amendment.

(1)

Incorporated by reference with Form S-1 filed November 11, 2020

(b) Financial statement schedules.

All schedules have been omitted because either they are not required, are not applicable or the information is otherwise set forth in the financial statements and related notes thereto.

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

	(ii)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

	(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

	(2)	That for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-3

	(4)	That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

	(5)	That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	(i)	Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

	(ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

	(iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

	(iv)	Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

	(f)	The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

	(h)	Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

	(i)	The undersigned Registrant hereby undertakes:

	(1)	That for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

	(2)	That for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	*	Paragraph references correspond to those of Regulation S-K, Item 512.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Salt Lake City, State of Utah, on February 12, 2021.

		Vivakor, Inc.

		By:		/s/ Matthew Nicosia
				Name: Matthew Nicosia
				Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date

/s/ Matthew Nicosia	Chief Executive Officer and	February 12, 2021
Matthew Nicosia	Director (Principal Executive Officer)

*	Chief Financial Officer	February 12, 2021
Tyler Nelson	(Principal Accounting Officer and Principal Financial Officer)

*	Director	February 12, 2021
Joseph Spence

*	Director	February 12, 2021
Matthew Balk

*	Director	February 12, 2021
Trent Staggs

*	Director	February 12, 2021
Al Ferrara
Director

* By:	/s/ Matthew Nicosia
	Matthew Nicosia, Attorney-in-fact

II-5

Exhibit 4.2

THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS SUCH SALE, TRANSFER OR ASSIGNMENT IS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR SATISFIES THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION, OR IS EFFECTED PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH SALE, TRANSFER OR ASSIGNMENT IS EXEMPT FROM SUCH REGISTRATION.

VIVAKOR, INC.

CONVERTIBLE PROMISSORY NOTE

$___________

________, 2013

Vivakor, Inc., a Nevada corporation (the “Company”), for value received, promises to pay to the order of ___________________________________, or its permitted assigns (“Holder”), the principal sum of ______________________________ ($________) plus simple interest thereon from the date of this Note until fully-paid at the rate of twelve percent (12.0%) per annum or such lesser rate of interest as may be required by applicable laws regulating the legal rate of interest.

1. Maturity. This Note shall mature automatically and the entire outstanding principal amount, together with all interest accrued under this Note, shall become due and payable on the date that is one (1) years from the date of issuance (“Maturity Date”), unless this Note, before such date, is converted into shares of capital stock of the Company pursuant to Section 5 hereof.

2. Payment of Principal and Interest. Interest payments shall be accrued to the principle on an annual basis.

3. Prepayment and Trickle out Agreement.

(a) This Note may NOT be prepaid at any time or from time to time, in whole or in part.

(b) This note is subject to a trickle out agreement that will make the holder of the note an insider and subject to insider liquidation rules.

4. Waiver of Presentment. The Company hereby waives presentment of this Note, protest, dishonor and notice of dishonor.

5. Conversion of Note.

(a) Conversion into precious metals produced from the Company. At the time of Conversion the Company may offer to the note holder the option accept payment in the form of precious metals. The price for the precious metals will be the lesser of either the spot price of gold on the day of the investment or the spot price of gold on the day of prepayment.

(b) Conversion into Stock. At the option of the Holder, at end of the term, the principal amount of this Note and any accrued interest may be convert into fully-paid and nonassessable shares of common stock at the Conversion Price (as defined herein). The number of such shares of common stock that Holder shall be entitled to receive, and shall receive, upon such conversion shall be determined by dividing the aggregate amount of principal and interest under this Note being so converted by the Conversion Price (as defined herein). Holder agrees to execute and deliver the form of Notice of Conversion attached hereto. Upon receipt by the Company of any such Notice of Conversion, the election to convert shall be irrevocable and the date the Notice of Conversion was executed by the Holder shall be the “Conversion Date”.

(c) Conversion Price. Subject to adjustment as provided below, the “Conversion Price” shall equal the lesser of (i) a dollar ($1.00) per share and (ii) ninety percent (90%) of the “fair market value” of one share of Company common stock with a conversion floor of $.05 per share. For purposes of this Note, “fair market value” shall mean the (i) average of the closing bid and ask prices during the ten (10) trading days prior to the Conversion Date, if the Company common stock is listed on a national exchange or automated quotation system, or (ii) the reasonable price established from time to time by the Board of Directors if the Company common stock is not so listed.

(d) Stock Certificates. Upon conversion into common stock, the Company shall issue and deliver to Holder, or to Holder’s nominee or nominees, a certificate or certificates representing the number of shares of common stock to which Holder shall be entitled as a result of conversion as provided herein.

(e) Adjustments to Conversion Price for Diluting Issues.

(i) Special Definitions. For purposes of this Subsection 5(d), the following definitions shall apply:

(A) "Original Issue Date" shall mean the date on which the first Note is first issued.

(B) "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock.

(C) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Subsection 5(d)(iii) below, deemed to be issued) by the Company after the Original Issue Date, and other than shares of Common Stock issued or issuable:

(1) as a dividend or distribution on all shares of Common Stock;

(2) by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clause (1);

(3) upon the exercise of options excluded from the definition of "Option" in Subsection 5(d)(i)(A); or

(4) upon conversion of the Notes.

(f) "Rights to Acquire Common Stock" (or "Rights") shall mean all rights issued by the Company to acquire common stock whatever by exercise of a warrant, option or similar call or conversion of any existing instruments, in either case for consideration fixed, in amount or by formula, as of the date of issuance.

(ii) No Adjustment of Conversion Price. No adjustment in the number of shares of Common Stock issuable upon conversion of the Notes shall be made, by adjustment in the applicable Conversion Price thereof: (a) unless the consideration per share (determined pursuant to Subsection 5(d)(v)) below for an Additional Share of Common Stock issued or deemed to be issued by the Company is less than the applicable Conversion Price in effect on the date of, and immediately prior to, the issue of such additional shares, or (b) if prior to such issuance, the Company receives written notice from the holders of at least a majority of the then outstanding Notes (determined by principal amount) agreeing that no such adjustment shall be made as the result of the issuance of Additional Shares of Common Stock.

(iii) Issue of Securities Deemed Issue of Additional Shares of Common Stock. If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or other Rights to Acquire Common Stock, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options, Rights or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to Subsection 5(d)(v) hereof) of such Additional Shares of Common Stock would be less than the applicable Conversion Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common Stock are deemed to be issued:

(A) No further adjustment in the Conversion Price shall be made upon the subsequent issue of shares of Common Stock upon the exercise of such Rights or conversion or exchange of such Convertible Securities;

(B) Upon the expiration or termination of any unexercised Option or Right, the Conversion Price shall not be readjusted, but the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option or Right shall not be deemed issued for the purposes of any subsequent adjustment of the Conversion Price; and

(C) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option, Right or Convertible Security, including, but not limited to, a change resulting from the anti-dilution provisions thereof, the Conversion Price then in effect shall forthwith be readjusted to such Conversion Price as would have obtained had the adjustment that was made upon the issuance of such Option, Right or Convertible Security not exercised or converted prior to such change been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option, Right or Convertible Security.

(iv) Adjustment of Conversion Price upon Issuance of Additional Shares of Common Stock. If the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 5(d)(iii), but excluding shares issued as a dividend or distribution as provided in Subsection 5(f) or upon a stock split or combination as provided in Subsection 5(e)), without consideration or for a consideration per share less than the applicable Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, such Conversion Price shall be reduced, concurrently with such issue to a price equal to the price at which such Additional Shares of Common Stock were issued and sold.

Notwithstanding the foregoing, the applicable Conversion Price shall not be reduced if the amount of such reduction would be an amount less than $.50, but any such amount shall be carried forward and reduction with respect thereto made at the time of and together with any subsequent reduction which, together with such amount and any other amount or amounts so carried forward, shall aggregate $.50 or more.

(v) Determination of Consideration. For purposes of this Subsection 5(d), the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

(A) Cash and Property: Such consideration shall:

(1) insofar as it consists of cash, be computed at the aggregate of cash received by the Company, excluding amounts paid or payable for accrued interest or accrued dividends;

(2) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

(3) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (1) and (2) above, as determined in good faith by the Board of Directors.

(B) Options, Rights and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 5(d)(iii), relating to Options, Rights and Convertible Securities, shall be determined by dividing

(1) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options, Rights or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options, Rights or the conversion or exchange of such Convertible Securities, by

(2) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

(g) Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

(h) Adjustment for Certain Dividends and Distributions. In the event the Company at any time, or from time to time after the Original Issue Date shall make or issue, a dividend or other distribution payable in Additional Shares of Common Stock, then and in each such event the Conversion Price shall be decreased as of the time of such issuance, by multiplying the Conversion Price by a fraction:

(i) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance, and

(ii) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

(i) Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date shall make or issue a dividend or other distribution payable in securities of the Company other than shares of Common Stock, then and in each such event provision shall be made so that the holders of the Notes shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Company that they would have received had their Notes been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period given application to all adjustments called for during such period, under this paragraph with respect to the rights of the holders of the Notes.

(j) Adjustment for Reclassification, Exchange, or Substitution. If the Common Stock issuable upon the conversion of the Notes shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation, or sale of assets for below), then and in each such event the holder of each Notes shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such Notes might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein.

6. No Rights as Stockholder. This Note does not entitle Holder to voting rights or any other right as a shareholder of the Company before the conversion hereof.

7. Loss, Theft or Destruction of Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft or destruction of this Note and of indemnity or security reasonably satisfactory to the Company, the Company shall make and deliver a new Note that shall carry the same rights to interest (unpaid and to accrue) carried by this Note, stating that such Note is issued in replacement of this Note, making reference to the original date of issuance of this Note (and any successor hereto) and dated as of such cancellation, in lieu of this Note.

8. Severability. Every provision of this Note is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

9. Miscellaneous.

(a) No Fractional Units or Scrip. No fractional shares or scrip representing fractional Units shall be issued upon the conversion of this Note. In lieu of any fractional shares to which Holder otherwise would be entitled, the Company shall make a cash payment equal to the Conversion Price multiplied by such fraction.

(b) Issue Date. The provisions of this Note shall be construed and shall be given effect in all respects as if this Note had been issued and delivered by the Company on the earlier of the date hereof or the date of issuance of any Note for which this Note is issued in replacement. This Note shall be binding on any successor or assign of the Company.

(c) Governing Law. This Note shall constitute a contract under the laws of the State of Nevada and for all purposes shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to the conflicts of law provisions thereof.

(d) Compliance With Usury Laws. The Company and Holder intend to comply with all applicable usury laws. In fulfilling this intention, all agreements between the Company and Holder are expressly limited so that the amount of interest paid or agreed to be paid to Holder for the use, forbearance, or detention of money under this Note shall not exceed the maximum amount permissible under applicable law.

If for any reason payment of any amount required under this Note shall be prohibited by law, then the obligation shall be reduced to the maximum allowable by law. If for any reason Holder receives as interest an amount that would exceed the highest lawful rate, then the amount which would constitute excessive interest shall be applied to the reduction of the principal of this Note and not to the payment of interest. If any conflict arises between this provision and any provision of any other agreement between the Company and Holder, then this provision shall control.

(e) Legal Representation. Holder agrees and represents that such party has been represented by such party's own legal counsel with regard to all aspects of this Note, or if such party is acting without legal counsel, that such party has had adequate opportunity and has been encouraged to seek the advice of such party's own legal counsel prior to the execution of this Agreement.

(f) Jurisdiction. Any action whatsoever brought upon or relating to this Note shall be instituted and prosecuted in the state courts located in Orange County, California, or the federal district court therefore, and each party waives the right to change the venue. The parties hereto further consent to accept service of process in any such action or proceeding by certified mail, return receipt requested,

(g) Restrictions. Holder acknowledges that all shares of common stock acquired upon the conversion of this Note shall be subject to restrictions on resale imposed by state and federal securities laws.

(h) Assignment. Subject to restrictions on resale imposed by state and federal securities laws, Holder may assign this Note or any of the rights, interests or obligations hereunder, by operation of law or otherwise, in whole or in part, to any person or entity so long as such assignee agrees to be bound by the terms and conditions of the Agreement (including the representations and warranties of the purchasers therein). Effective upon any such assignment, the person or entity to whom such rights, interests and obligations are assigned shall have and exercise all of Holder’s rights, interests and obligations hereunder as if such person or entity were the original Holder of this Note.

(i) Notices. Any notice, request or other communication required or permitted hereunder shall be given upon personal delivery, overnight courier or upon the fifth (5^th) day following mailing by registered mail (or certified first class mail if both the addresser and addressee are located in the United States), postage prepaid and addressed to the parties hereto as follows:

	To the Company:	Vivakor, Inc.
		7700 Irvine Center Drive, Suite 800
		Irvine, Ca 92618
		Attention: Matt Nicosia


	To Holder:	At the address set forth on the signature page hereto or to such other single place as any single addressee designates by written notice to the other addressee.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

IN WITNESS WHEREOF, Vivakor, Inc. has caused this Secured Convertible Promissory Note to be executed by its officer thereunto duly authorized.

	The “Company”:

	VIVAKOR, INC.,
	a Nevada corporation


	By: ________________________________
	Matt Nicosia, Chief Executive Officer


	Date Funds Cleared:___________________


Accepted and Agreed to:

	“Holder”:

	__________________________________
	Print Name


	__________________________________
	Signature


	Address:

	__________________________________


	__________________________________


	Phone:
	__________________________________


	Email:
	__________________________________

NOTICE OF CONVERSION TO STOCK

TO BE SENT IN AT TIME OF CONVERSION ONLY

Vivakor, Inc.

7700 Irvine Center Drive Suite 800

Irvine CA 92618

This Notice is provided to inform you that the undersigned irrevocably elects to convert the Convertible Promissory Note (the “Note”) of Vivakor, Inc., a Nevada corporation (the “Company”), as provided in Section 5 of the Note, effective as of the date written below.

The conversion price of the Note shall be determined in accordance with Section 5. The number of shares to which the undersigned will be entitled shall be determined by dividing (i) the principal of and accrued interest on this Note set forth below by (ii) the conversion price.

Effective as of the Conversion Date this Note is cancelled and terminated as to the amount of the principal and interest set forth below. The undersigned will receive a stock certificate of Vivakor, Inc. representing the number of shares of stock into which the Company Common Stock is converted.

Date: __________, 20__
(Year after funds cleared)	Signature

	_____________________________________ Print Name

Principal amount: $_________	Address:
	_____________________________________
Accrued interest: $_________	_____________________________________
	_____________________________________

Number of Shares: __________

Exhibit 4.3

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT NOR THE SECURITIES INTO WHICH THIS INSTRUMENT ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount and Purchase Price: $______________

Date: ____________________

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, VIVAKOR, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of __________________________________________, or registered assigns (the “Holder”), the sum of $______________________ together with any interest as set forth herein, on the date that is the earlier of (i) twelve (12) months from the date hereof or (ii) ten (10) business days following such date as the Borrower shall have consumated the listing (the “Uplisting”) of its common stock on the NASDAQ Capital Markets, the New York Stock Exchange, or such other similar senior exchange (a “Senior Exchange”) (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of ten (10%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365-day year. Interest shall commence accruing quarterly on the Issue Date and shall be payable in arrears on the Maturity Date. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

Article I. CONVERSION RIGHTS

1.1 Conversion. If (A) the Uplisting shall have occurred prior to the Maturity Date, the Borrower shall have the right in respect of the remaining outstanding balance of this Note to convert all or any part of the outstanding balance of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Uplisting Conversion Price (as defined herein) determined as provided herein (an “Uplisting Conversion”), or (B) the Uplisting shall not have occurred prior to the Maturity Date, the Borrower shall have the right in respect of the remaining outstanding balance of this Note to convert all or any part of the outstanding and unpaid balance of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Non-Uplisting Conversion Price (as defined herein) determined as provided herein (a “Non-Uplisting Conversion”) or (C) a Qualified Financing shall have occurred prior to the Maturity Date, the Borrower shall have the right in respect of the remaining outstanding balance of this Note to convert all or any part of the outstanding balance of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Qualified Financing Conversion Price (as defined herein) determined as provided herein (a “Qualified Financing Conversion”); provided, however, that in no event shall this Note be converted in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso; provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Uplisting Conversion Price or Non-Uplisting Conversion Price or the Qualified Financing Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered by the Holder or the Borrower, as applicable, in accordance with Section 1.3 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Holder or the Borrower, as applicable, before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the option of the party entitled to deliver the Notice of Conversion, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the option of the party entitled to deliver the Notice of Conversion, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 hereof. “Qualified Financing” shall mean a transaction or series of transactions, including, but not limited to, equity financings, business combinations or other issuances of the Company’s equity securities totaling, in aggregate, $5,000,000 prior to the Maturity Date.

1.2 Conversion Prices. (A) The conversion price upon an Uplisting Conversion shall equal the lower of (i) 80% of the opening price of the Borrower’s shares of Common Stock, as listed on the Senior Exchange, on the first day on which the Borrower’s shares are traded thereon (representing a 20% discount), or (ii) 80% of the offering price of the Borrower’s shares of Common Stock, as offered in a financing in connection with the Uplisting (representing a 20% discount) (the “Uplisting Conversion Price”); (B) the conversion price upon a Non-Uplisting Conversion shall equal 80% of the Market Price (as defined herein) (representing a 20% discount) (the “Non-Uplisting Conversion Price”); and (C) the conversion price upon a Qualified Financing Conversion shall equal the price at which the securities issued in connection with the Qualified Financing were issued (the “Qualified Financing Conversion Price”). “Market Price” means the weighted average Trading Price (as defined below) for the Common Stock during the five (5) Trading Day period ending on the last complete Trading Day immediately prior to the Conversion Date. “Trading Price” means, for any security as of any date, the weighted average trading price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the weighted average trading price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no weighted average trading price of such security is available in any of the foregoing manners, the weighted average of the highest trading prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as reasonably determined by the Borrower. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

1.3 Method of Conversion.

(a) Mechanics of Conversion. As set forth in Section 1.1 hereof, this Note may be converted by the Borrower by submitting a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time).

(b) Surrender of Note Upon a Discretionary or Conversion. Upon conversion of the entire outstanding balance of this this Note in accordance with the terms hereof, the Holder shall be required to physically surrender this Note to the Borrower. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

(c) Delivery of Common Stock Upon Conversion. Upon delivery by the Borrower of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.3, the Borrower shall issue and deliver or cause to be issued and delivered to the Holder certificates for the Common Stock issuable upon such conversion within five (5) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Subject to Section 1.1, upon receipt of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion.

(d) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

(e) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $500 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.3(e) are justified.

1.4 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.4 and who is an Accredited Investor (as defined in the Purchase Agreement). Subject to the Purchase Agreement, any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default. Notwithstanding anything contained herein to the contrary, the shares of Common Stock issuable upon conversion of this Note are subject to Section 7 of the Purchase Agreement and any certificates evidencing shares issuable upon conversion of this Note shall bear a restrictive legend until such time as any restrictions provided in Section 7 thereof have been satisfied.

1.5 Conversion or Repayment Upon the Maturity Date. The Borrower shall have the right to convert the entirety of this Note on the Maturity Date at a conversion price equal to the Non-Uplisting Conversion Price. In addition, subject to Section 1.1 hereof, upon the Maturity Date, if not earlier converted by the Borrower, the Borrower shall have the option to repay the outstanding balance of the Note (principal and accrued interest), in full, in accordance with this Section 1.5. In the event that an Uplisting has occurred and the Borrower is opting for cash repayment, the Borrower has the option to make payment to the Holder of an amount in cash equal to 115% multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.3 hereof In the event that an Uplisting has not occurred and the Borrower is opting for cash repayment, the Borrower has the option to make payment to the Holder of an amount in cash equal to the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.3 hereof

1.6 Prepayment. The Borrower shall have the right, exercisable on not more than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.6. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower (which direction shall to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal to 115% multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.3 hereof (the “Optional Prepayment Amount”).

Article II. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

2.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

2.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder or the Borrower of their conversion rights in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2) business days after the Holder or the Borrower shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

2.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

2.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

2.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

2.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

2.7 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

2.8 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

2.9 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

Upon the occurrence and during the continuation of any Event of Default and upon delivery of a written notice of default (a “Notice of Default”) to the Borrower, and after providing a ten (10) business day opportunity to cure said Event of Default, the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Section 1.3(e) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection. At the sole option of the Borrower, upon the occurrence and during the continuation of any Event of Default, the Borrower shall be permitted to pay the Default Amount by issuing shares of Common Stock of the Borrower to the Holder at a conversion price equal to 80% of the Default Market Price (representing a 20% discount). “Default Market Price” means the weighted average Trading Price (as defined above) for the Common Stock during the five (5) Trading Day (as defined above) period ending on the last complete Trading Day immediately prior to the date of receipt of the written Notice of Default.

Article III. MISCELLANEOUS

3.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

3.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

Vivakor, Inc.

8565 S. Eastern Ave., Suite 150

Las Vegas, NV 89123

Attn: Matthew Nicosia

Email: matt@vivakor.com

With a copy to (which copy shall not constitute notice):

Lucosky Brookman LLP

101 Wood Avenue South

Fifth Floor

Woodbridge, New Jersey 08830

Attn: Joseph Lucosky

e-mail: jlucosky@lucbro.com

If to the Holder:

To the address identified on the

signature page to the Purchase Agreement.

3.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

3.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder provided that the Holder obtains the prior written consent of the Borrower.

3.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

3.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of Nevada or in the federal courts located in Nevada. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

3.7 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

HOLDER

By: ______________________________

Name: ____________________________

Date: _____________________________

[Borrower signature page follows]

IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its name by its duly authorized officer.

VIVAKOR, INC.

By: ______________________________

Matthew Nicosia

Chief Executive Officer

Date: _____________________________

(Date funds cleared and accepted)

EXHIBIT A -- NOTICE OF CONVERSION

(To be sent in at time of conversion only)

The undersigned hereby elects to convert $_________________ principal amount of the Convertible Promissory Note (defined below by acceptance date) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Vivakor, Inc., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note with an acceptance date of __________________, (the “Note”). No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

The Borrower shall issue a certificate or certificates for the number of shares of Common Stock set forth below in the name(s) specified immediately below (the “Holder”) or, if additional space is necessary, on an attachment hereto:

HOLDER _______________________________

Phone __________________________________

Address ________________________________

Email __________________________________

_______________________________________

SSN/TIN _______________________________

Signature ____________________________

Date ________________________________

Office Use Only:

Notice of Conversion Received: ______________

Principal amount of Note: ___________________

Interest on Note ___________________________

Total Amount ____________________________

Applicable Conversion Price: ________________

Number of shares of common stock to be issued

pursuant to conversion of the Note: ___________

Exhibit 4.4

Note

Date:		Jun 20, 2020

Note Amount:		$90,645

Borrower:		VIVAVENTURES OIL SANDS, INC.

Lender:		JPMorgan Chase Bank, N.A.

PROMISE TO PAY.

Borrower promises to pay to the order of Lender the Note Amount, plus interest on the unpaid principal balance at the Note Rate, and all other amounts required by this Note.

DEFINITIONS.

"CARES Act" means the Coronavirus Aid, Relief, and Economic Security Act and the applicable Paycheck Protection Program rules, interim rules, regulations, guidance and Frequently Asked Questions.

"Covered Period" means the period beginning on the date on which the proceeds of the Loan are disbursed to Borrower and ending on whichever of the following two dates occurs ﬁrst:

A. The date that is 24 weeks after the date of disbursement, and

B. December 31, 2020.

"Deferral Period" means the period ending on the date on which the amount of any forgiveness of the Loan determined under the CARES Act is remitted to Lender by SBA or forgiveness is denied. However, if Borrower does not apply for forgiveness of the Loan within 10 months after the last day of the Covered Period, the Deferral Period will end on the date that is 10 months after the last day of the Covered Period.

"Loan" means the loan evidenced by this Note.

"Maturity Date" means the ﬁfth anniversary of the disbursement date of the Loan.

"Note Rate" means an interest rate of 0.98% Per Annum and interest shall accrue on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.

"Per Annum" means for a year deemed to be comprised of 360 days.

"SBA" means the Small Business Administration, an agency of the United States of America.

CONDITIONS PRECEDENT TO FUNDING OF LOAN.

Before the funding of the Loan, the following conditions must be satisﬁed:

A. Lender has approved the request for the Loan.

B. Lender has received approval from SBA to fund the Loan.

PAYMENT TERMS.

Borrower will pay this Note as follows:

No Payments During Deferral Period. There shall be no payments due by Borrower during the Deferral Period.

Principal and Interest Payments. Upon the expiration of the Deferral Period, Lender will notify Borrower (in a billing statement or by other means) of the due date for the ﬁrst payment (the "First Payment Date"). Commencing on the First Payment Date and continuing on the same day of each month thereafter until the Maturity Date, Borrower shall pay to Lender equal monthly payments of principal and interest, through the month prior to the Maturity Date; provided that the initial payments shall be applied to the interest accrued during the Deferral Period until such amount has been satisﬁed.

Maturity Date. On the Maturity Date, Borrower shall pay to Lender any and all unpaid principal plus accrued and unpaid interest. This Note will mature on the Maturity Date.

If any payment is due on a date for which there is no numerical equivalent in a particular calendar month then it shall be due on the last day of such month. If any payment is due on a day that is not a Business Day, the payment will be made on the next Business Day. The term "Business Day" means a day other than a Saturday, Sunday or any other day on which national banking associations are authorized to be closed.

Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise agreed or required by applicable law. However, in the event the Loan, or any portion thereof, is forgiven pursuant to the Paycheck Protection Program under the CARES Act, the amount so forgiven shall be applied in accordance with applicable law and regulations.

If Lender or SBA determines that Borrower was not eligible for all or any portion of the Loan, then Borrower shall repay the Loan, or the portion of the Loan for which Borrower was not eligible, together with any accrued and unpaid interest, immediately upon notice from Lender or SBA of this determination.

Borrower may prepay this Note at any time without payment of any premium.

AGREEMENTS.

Borrower understands and agrees as follows:

	A.	The Loan is to be made under the SBA's Paycheck Protection Program.
	B.	Any loan made under the SBA's Paycheck Protection Program must be submitted to and approved by SBA. As there is limited funding available under the Paycheck Protection Program, it is possible that not all applications submitted will be approved by SBA. Lender is participating in the Paycheck Protection Program to help businesses experiencing the economic impacts from COVID-19 obtain funding through the program. Lender anticipates high application volume and that there may be processing and system issues that impact the intake, ordering and/or submission of loan requests to SBA. While Lender will use best eﬀorts in this extraordinary time, Lender cannot guarantee it will be able to submit Borrower's application before SBA funding is no longer available. Borrower understands and agrees that Lender will not be liable to Borrower if Borrower fails to obtain the loan applied for. As such, Borrower releases and waives claims concerning Lender's processes and systems for obtaining, ordering and submitting applications to SBA and further releases and waives to the maximum extent not prohibited by law any claims against Lender for special, exemplary, punitive or consequential damages relating to any application. This provision supersedes any prior communications, understandings or agreements on the issues set forth herein.

Borrower must use all Loan proceeds only for purposes permitted under the Paycheck Protection Program provided for in the CARES Act.

Forgiveness of the Loan is not automatic and Borrower must request it. Borrower is responsible for understanding the requirements for obtaining forgiveness, and for complying with those requirements. Borrower is not relying on Lender for its understanding of the requirements for forgiveness such as eligible expenditures, necessary records/documentation, Borrower certiﬁcations, or possible reductions due to changes in number of employees or compensation. Rather Borrower will consult the SBA's Paycheck Protection Program materials. Borrower understands that these requirements may change from time to time.

The application for this Loan is subject to review and Borrower may not receive the Loan. The Loan also remains subject to availability of funds under the SBA's Paycheck Protection Program, and to the SBA issuing an SBA loan number.

If the terms and conditions of the SBA’s Paycheck Protection Program are changed in any manner that retroactively makes or requires changes to the terms of the Loan, whether by statute, regulation, interpretation, guidance or judicial action, then the terms of this Note will be automatically amended to reﬂect those retroactively made or required changes.

DEFAULT.

Borrower is in default under this Note if Borrower:

	A.	Fails to make a payment when due under the Note or otherwise fails to comply with any provision of this Note.
	B.	Does not disclose, or anyone acting on its behalf does not disclose, any material fact to Lender or SBA.
	C.	Makes, or anyone acting on its behalf makes, a materially false or misleading representation, attestation or certiﬁcation to Lender or SBA in connection with Borrower’s request for this Loan under the CARES Act.

Becomes the subject of a proceeding under any bankruptcy or insolvency law, has a receiver or liquidator appointed for any part of its business or property, or makes an assignment for the beneﬁt of creditors.

Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent.

Becomes the subject of a civil or criminal action that Lender believes may materially aﬀect Borrower's ability to pay this Note.

LENDER'S RIGHTS IF THERE IS A DEFAULT.

Without notice or demand and without giving up any of its rights, Lender may:

A. Require immediate payment of all amounts owing under this Note.

B. Collect all amounts owing from Borrower.

C. File suit and obtain judgment.

LENDER'S GENERAL POWERS.

Without notice or Borrower's consent, Lender may incur expenses to collect amounts due under this Note and enforce the terms of this Note. Among other things, the expenses may include reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance.

GOVERNING LAW AND VENUE; WHEN FEDERAL LAW APPLIES.

When SBA is the holder, this Note shall be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for ﬁling papers, recording documents, giving notice, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

If SBA is not the holder, this Note shall be governed by and construed in accordance with the laws of the State of Ohio where the main oﬃce of Lender is located. MATTERS REGARDING INTEREST TO BE CHARGED BY LENDER AND THE EXPORTATION OF INTEREST SHALL BE GOVERNED BY FEDERAL LAW (INCLUDING WITHOUT LIMITATION 12 U.S.C. SECTIONS 85 AND 1831u) AND THE LAW OF THE STATE OF OHIO. Borrower agrees that any legal action or proceeding with respect to any of its obligations under this Note may be brought by Lender in any state or federal court located in the State of Ohio, as Lender in its sole discretion may elect. Borrower submits to and accepts in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. Borrower waives any claim that the State of Ohio is not a convenient forum or the proper venue for any such suit, action or proceeding. The extension of credit that is the subject of this Note is being made by Lender in Ohio.

10.

SUCCESSORS AND ASSIGNS.

Under this Note, Borrower includes its successors, and Lender includes its successors and assigns.

11.

GENERAL PROVISIONS.

A. Borrower must sign all documents necessary at any time to comply with the Loan.

Borrower’s execution of this Note has been duly authorized by all necessary actions of its governing body. The person signing this Note is duly authorized to do so on behalf of Borrower.

This Note shall not be governed by any existing or future credit agreement or loan agreement with Lender. The liabilities guaranteed pursuant to any existing or future guaranty in favor of Lender shall not include this Note.

The liabilities secured by any existing or future security instrument in favor of Lender shall not include this Note.

Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

If any part of this Note is unenforceable, all other parts remain in eﬀect.

To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor.

Borrower's liability under this Note will continue with respect to any amounts SBA may pay Lender based on an SBA guarantee of this Note. Any agreement with Lender under which SBA may guarantee this Note does not create any third party rights or beneﬁts for Borrower and, if SBA pays Lender under such an agreement, SBA or Lender may then seek recovery from Borrower of amounts paid by SBA.

Lender reserves the right to modify the Note Amount based on documentation received from Borrower.

12.

ELECTRONIC SIGNATURES.

Borrower agrees that its electronic signature shall have the same force and eﬀect as an original signature and shall be deemed (i) to be "written" or "in writing" or an “electronic record”, (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic ﬁles. Such paper copies or "printouts," if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form.

Exhibit 4.5

Thank you for allowing us to serve you with your Paycheck Protection Program loan. We recognize the significant role these funds will play in the sustainability and future growth of your organization during this challenging time for our clients, communities, and nation.

Please remember to maintain the necessary records to obtain the provided loan forgiveness as soon as possible. We are expecting borrowers to provide us with the information required to apply for full forgiveness of loan balances no later than eight (8) weeks from the loan origination date. This is a critical part of this program, and by working with us on your loan, you acknowledge that you will help us better serve other borrowers by providing this information accurately and in conjunction with the above timeline.

We are here and have been since 1893. Please continue to look to us for help, guidance, and advice for your financial services and needs. Times are challenging and unsure, but we believe it is in these times we can provide the most value. We energetically embraced the Paycheck Protection Program because we know it is critical for you, and so many others, and we will equally embrace and engage anything we know provides such a tremendous benefit to those we serve.

We are proud to serve you and do not take that privilege lightly, and we look forward to serving you again as our nation triumphs over the current circumstances and emerges stronger than ever. With the deepest appreciation and best wishes for your continued success, I am

Very gratefully yours,

Brian K. Plum

Chief Executive Officer

Member FDIC	Blue Ridge Bank, N.A.	www.mybrb.com
Equal Housing Lender

ACH TRANSFER AUTHORIZATION

You are authorizing Blue Ridge Bank N.A. to deposit your SBA Payroll Protection Program proceeds into the below referenced deposit account. The borrower is responsible for verifying the accuracy of the information completed on this document.

Account Holder(s) Name(s): RPC Design & Manufacturing LLC

Amount to be Transferred: $ 205,100.00

CREDIT TO

Account Title:

Financial Institution:

Account Number:

Routing Number:

Type of Account: Checking Savings

Authorization Agreement:

Account Holder hereby authorizes Blue Ridge Bank to deposit SBA Payroll Protection Program funds into the account listed above. If this agreement changes any prior authorization between you and the Account Holder, the prior authorization is hereby canceled, and Account Holder instructs Blue Ridge Bank to follow this authorization. Account Holder further acknowledges that you have no responsibility to contact Account Holder when the above transfer occur. Account Holder understands that Account Holder can call Blue Ridge Bank to find out whether or not the transfer has been made. Account Holder further acknowledges that the Financial Institution will not be liable for any charges, including but not limited to, any charges related to items returned because of insufficient funds, or for any late charges or additional interest if this authorization is for time- sensitive transactions. A $100.00 service charge will be imposed for each transfer.

SBA PAYCHECK PROTECTION PROGRAM LOAN AGREEMENT

This SBA Paycheck Protection Program Loan Agreement (“Agreement”) is by and between Blue Ridge Bank, N.A. (“Bank”) and the borrower (“Borrower”) executing this Agreement below, applies to the loan (“Loan”) evidenced by the Paycheck Protection Program Note (“Note”) of even date herewith, and is entered into pursuant to Sections 1102 and 1106 of the Coronavirus Aid, Relief and Economic Security Act (“Act”) and the Interim Final Rule of the Small Business Administration (“SBA”) promulgated on April 2, 2020 and identified therein as Docket No. SBA-2020-0015, 13 C.F.R. Part 120 and supplemented by the SBA on April 4, 2020 (“Rule”) (the Act and the Rule are collectively, the “Program”). The term “Loan Documents” as used herein means this Agreement, the Note, the Paycheck Protection Program Borrower Application Form submitted by Borrower to the SBA in connection with the Loan (“Application”) and all documentation and written information provided by Borrower to Bank or to the SBA pursuant to the Application (“Application Documents”). The term “Obligations” as used herein means the principal balance of the Note and all interest accrued thereon.

Relying upon the covenants, agreements, representations and warranties made herein by Borrower, Bank is willing to extend credit to Borrower upon and subject to the terms and conditions set forth herein and in the Note. Bank and Borrower agree as follows:

Borrower covenants, agrees, represents and warrants that:

All information, answers, statements, records, calculations, authorizations, certifications and other documentation provided with or made by Borrower in the Application or the Application Documents are truthful, accurate and complete.

Borrower will expend the proceeds of the Note in compliance with the Program, will expend no less than 75% of the proceeds of the Note for “payroll costs”, as defined in the Act and item 2.f. of the Rule, and will expend the remainder of the proceeds of the Note for other eligible expenses qualifying for forgiveness under the Program and as certified by Borrower in the Application.

Borrower will exercise its best and most diligent efforts to comply with all requirements of the Program necessary to enable forgiveness of the Obligations (“Forgiveness”) under the Program and any Additional Rule (as defined below).

Borrower shall not conduct its business activities or otherwise engage in activities that would prevent Forgiveness.

Borrower will operate its business in compliance with all federal, state and local laws, rules and regulations applicable to its business, properties, operations or finances.

Borrower shall allow and provide to Bank and its agents, during normal business hours, access to its books, records, accounting records and such other documents of Borrower as Bank shall reasonably require, including books, records, accounting records and such other documents held by a third party on behalf of Borrower or to enable the third party to provide services to Borrower (other than attorney-client privileged materials).

2. Borrower covenants and agrees that should Bank request the SBA to purchase the expected forgiveness amount of the Obligations as provided by the Program, Borrower will promptly and fully provide to Bank all documents, statements, calculations, records, certifications, authorizations and other information (“Submission Materials”) necessary for Bank to make such request and to provide to the SBA a complete report (as described in the Rule), including all supporting Submission Materials necessary for Bank to document all prior expenditures of the proceeds of the Note by Borrower and to make and establish to the satisfaction of the SBA the Bank’s reasonable expectation of additional expenditures of the proceeds of the Note to be made by Borrower.

3. Borrower covenants and agrees that upon such time as the Program and/or any Additional Rule permits Borrower and/or Lender to seek Forgiveness, then either, as applicable, (a) upon the request of Bank, Borrower will promptly and fully file or otherwise provide to the SBA all Submission Materials required by the SBA in order to promptly effect Forgiveness, or (b) promptly and fully provide to Bank all Submission Materials required by the SBA necessary for Bank to file or otherwise provide to the SBA all materials necessary to promptly effect Forgiveness, and Borrower shall certify and warrant to Bank the truthfulness, accuracy and completeness of all such Submission Materials provided to the SBA or Bank.

4. Borrower covenants and agrees that in the event that there shall be an Additional Rule pursuant to which the SBA, the United States Department of the Treasury (“Treasury”), any other department, agency or administration of the United States Government, or any facility, fund or any other mechanism established or sponsored by the SBA, the Treasury or any other such department, agency or administration (a “Facility”) is enabled to purchase, forgive or otherwise extinguish any or all of the Obligations by reimbursing or otherwise paying to Bank the Obligations or any portion thereof (a “Repurchase”), then either, as applicable, (a) upon the request of Bank, Borrower will promptly and fully file or otherwise provide to the SBA, the Treasury or the Facility all Submission Materials required by the SBA, the Treasury or the Facility to promptly effect the Repurchase, or (b) promptly and fully provide to Bank all Submission Materials required by the SBA, the Treasury or the Facility necessary for Bank to file or otherwise provide to the SBA, the Treasury or the Facility all materials necessary to effect the Repurchase, and Borrower shall certify to Bank the truthfulness, accuracy and completeness of all Submission Materials provided to the SBA, the Treasury, the Facility or Bank.

5. Borrower and Bank agree that interest on the principal balance of the Note shall be deferred for a period of six (6) months from the date hereof (“Deferred Interest”), and that the principal balance of the Note and accrued interest therein (including the Deferred Interest) will be paid to the Bank as provided in the Note.

6. Borrower and Bank agree that upon an Event of Default (as defined in the Note), Bank may declare a Default (as defined in and as provided by the Note) and take such actions as are permitted by the Note.

7. Borrower agrees that, except as preempted by the Program or any Additional Rule and except as interpretation of the terms hereof require reference to the Program or any Additional Rule, this Agreement shall be governed by and controlled as to enforcement, validity and effect by the laws, statutes and court decisions of the State of Virginia. All disputes, actions or proceedings between Borrower and Bank arising directly, indirectly or otherwise in connection with this Agreement or any other Loan Documents shall be litigated in the federal or state courts, as applicable, having jurisdiction over the situs of Bank’s principal office. Borrower consents and submits to the jurisdiction of the courts specified in the preceding sentence, and waives any right to seek to transfer or to change the venue of any such litigation.

BORROWER AGREES THAT ANY LITIGATION RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL BE COMMERCIAL IN NATURE AND COMPLEX. IN ORDER TO MINIMIZE THE COSTS AND TIME INVOLVED IN ANY LITIGATION, BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO, BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT. BORROWER ACKNOWLEDGES THAT SUCH WAIVER IS A MATERIAL INDUCEMENT TO BANK ENTERING INTO THIS AGREEMENT.

8. Borrower acknowledges and agrees that Bank may assign or transfer its rights and/or obligations under this Agreement and any other Loan Document, in whole or in part, to the SBA, the Treasury, a Facility or any purchaser or purchasers of the Note or any portion thereof.

9. In consideration of Bank entering into this Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower hereby releases and forever discharges Bank, its past, present and future shareholders, successors, assigns, officers, directors, agents, attorneys and employees together with their respective heirs, legal representatives, legatees, successors and assigns (collectively “Released Parties”) of and from all actions, claims, demands, damages, debts, losses, liabilities, costs, causes of action either at law or in equity and of whatever kind or nature, whether known or unknown, direct or indirect, by reason of any matter, cause or thing whatsoever arising out of or relating to the transactions which are the subject of this Agreement. Borrower agrees to promptly indemnify and hold each Released Party harmless from all actions, claims, demands, damages, debts, losses, costs, expenses, judgments, monetary sanctions and similar liabilities caused by, arising out of or relating to any breach by Borrower of any of its covenants, agreements, representations or warranties set forth herein.

10. As used herein, the term “Additional Rule” means any amendment to the Act; any additional federal statute altering or expanding the Rule; any Executive Order of the President of the United States altering or expanding the Rule; any official guidance, form, requirement, procedure, rule, regulation, reporting obligation, notice, program guide or other release by the SBA, the Treasury, a Facility or any other department, agency or administration of the United States Government altering or expanding the Rule or pertaining to, affecting or enabling forgiveness, purchase, repayment or other satisfaction of the principal balance of the Note and

interest accrued thereon at any time or from time to time and/or interest thereon (whether accrued or thereafter to accrue) on such principal balance.

11. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The counterparts of this Agreement may be executed via “wet” signature or electronic mark and may be delivered using .pdf or similar file type transmitted via electronic mail, cloud based server, e- signature technology or other similar electronic means (including, without limitation, use of an electronic signature service such as DocuSign).

Executed under seal and delivered as of the 20th day of May , 2020.

	RPC Design & Manufacturing LLC (SEAL)
	Name of Borrower


	By: /s/ Matt Nicosia
	Authorized Officer, Manager or Partner


	Matt Nicosia
	Print Name


	CEO
	Print Office Held


	BLUE RIDGE BANK, N.A.


	By:
	Authorized Officer

SBA PAYCHECK PROTECTION PROGRAM PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned borrower (“Maker”) hereby promises to pay to the order of Blue Ridge Bank, N.A. (“Payee”) or its assigns (each of Payee or such assigns hereinafter called “Holder”), in lawful money of the United States the principal amount specified adjacent to Maker’s signature below, as reduced as provided herein, together with interest on the unpaid principal balance of this Note from the date hereof until paid in full, at the interest rate (calculated on an a 30/360 basis), as set forth herein (the “Loan”).

1. Interest Rate. The interest rate on this Note is one percent (1.00%) per annum.

2. Payments. Payments of principal and interest will be deferred for six (6) months from the date of the making of this Note specified below (the last day of such period being the “Period End Date”). Thereafter, commencing on the seven (7) month anniversary of the date of this Note and continuing on the same date in each of the seventeen (17) succeeding calendar months, Maker shall pay to Holder a monthly payment equal to the sum of (a) one-eighteenth (1/18^th) of the principal balance of this Note as of the Period End Date, (b) applicable accrued interest, and (c) one-eighteenth (1/18^th) of the total interest accrued, but deferred, on the principal balance of this Note through the Period End Date. Any and all other charges due under the terms of this Note shall be due and payable with the last such monthly payment. The principal amount of this Note and interest due thereon shall be reduced by the amount of any Forgiveness or Repurchase (as such terms are defined herein). Holder and Maker agree that Holder will provide to Borrower in advance of the Period End Date a schedule specifying the amount(s) of the monthly payments set forth above (“Schedule”) and that the Schedule shall be deemed a part of and incorporated into this Note.

3. Term and Maturity Date. The term of this Note shall end upon the due date of the last monthly payment specified in Section 2. above (the “Maturity Date”).

4. Prepayment. This Note may be prepaid prior to the Maturity Date, in full or in part, together with all accrued interest on the date of prepayment, at any time, without penalty.

5. Set-Off. To the extent not prohibited by law, including the Coronavirus Aid, Relief and Economic Security Act (“Act”), the Interim Final Rule of the Small Business Administration (the “SBA”) promulgated on April 2, 2020 and identified therein as Docket No. SBA-2020-0015, 13 C.F.R. Part 120 and supplemented by the SBA on April 4, 2020 (the “Rule”) or any Additional Rule (as defined herein), Holder may exercise the right to set-off any amount due and payable under this Note, whether matured or unmatured, against any amount owing by Holder to Maker, including any and all of Maker’s deposit or similar accounts with Holder and further including all such accounts Maker holds jointly with another person or entity and all accounts with Holder that Maker may open in the future. Such right of set-off may be exercised by Holder against Maker or against any assignee of Maker for the benefit of creditors, receiver or execution, judgment or attachment creditor of Maker, notwithstanding the fact that such set-off right was not exercised by Holder prior to the making, filing or issuance or service upon Holder of, or a notice of, any

assignment for the benefit of creditors, appointment or application of a receiver, or issuance of execution, subpoena, order or warrant.

6. Method of Payment. All payments of principal or interest due under this Note shall be made by Maker as set forth on the signature page of this Note or to such other place or by such other method as provided in writing to Maker by Holder, and in such money of the United States as shall be legal tender for the payment of public and private debts. Whenever payment due hereunder falls due on a day which is a Saturday, Sunday or legal holiday under the laws specified in Section 10 below, such payment shall be made in the next succeeding day which is not a Saturday, Sunday or a legal holiday.

7. Default. The occurrence of any of the following events constitutes an event of default under this Note (each an “Event of Default”):

a. A determination by the SBA or the United States Department of the Treasury (the “Treasury”) that the Loan is not an “eligible loan” under the Act, the Rule or any Additional Rule;

b. A determination by the SBA or the Treasury that any use of the proceeds of the Note by Maker prohibits the forgiveness of principal and interest (whether or not then deferred as to payment as provided herein) due under this Note (“Forgiveness”) or a Repurchase (as defined herein) pursuant to the Act, the Rule or any Additional Rule and the payment of such forgiven or purchased principal and interest to Holder by the SBA, the Treasury or any Facility (as defined herein);

c. Any failure by Maker to make any payment due under this Note when or in the amount due;

d. Any act or omission of Maker resulting in the termination of the SBA’s guarantee of the Loan pursuant to the Act, the Rule or any Additional Rule;

The dissolution or other termination of the existence of Maker;

f. The commencement of any proceeding under bankruptcy or insolvency laws by or against Maker;

g. Maker’s failure to promptly and fully file or otherwise provide to the SBA, or to promptly provide to Holder so that it may file or otherwise provide to the SBA, all documents, statements, records, certification, calculations, authorizations and other information (“Submission Materials”) required by the SBA to promptly effect a Forgiveness;

h. Any breach by Maker of the Loan Agreement between Maker and Payee of even date herewith (“Loan Agreement”);

i. Maker’s failure to promptly and fully file or otherwise provide to the SBA, the Treasury, any other department, agency or administration of the United States Government, or any facility, fund or other mechanism established or sponsored by the

SBA, the Treasury or any other such department, agency or administration (each a “Facility”) enabled to purchase, forgive or otherwise extinguish this Note by reimbursing or otherwise paying to Holder the principal and all accrued, but unpaid, interest under this Note (a “Repurchase”) all Submission Materials required by the SBA, the Treasury or a Facility to promptly effect such Repurchase or Maker fails to promptly and fully provide to Holder all such Submission Materials required by the SBA, the Treasury or a Facility necessary for Holder to file or otherwise provide to the SBA, the Treasury or a Facility all materials necessary to effect such Repurchase;

j. Any default by Maker on any other loan, extension of credit, security or similar credit document with Holder;

k. Any default on any loan, extension of credit, security agreement, sale of assets or any other agreement with another creditor if Holder believes such default may materially affect Maker’s ability to pay this Note;

l. Maker becomes the subject of a civil or criminal action that Holder believes may materially affect Maker’s ability to pay this Note; or

m. The reorganization or merger, or change of 25% or more of the equity ownership, of Maker without Holder’s prior written consent.

Upon an instance of an Event of Default, Holder may declare Maker in default (“Default”) and this Note immediately due and payable, and pursue any remedy available to it under the Act, the Rule, any Additional Rule, or otherwise at law or in equity.

8. Interest Rate After Default. Except to the extent prohibited by the Act, the Rule or any Additional Rule, upon Default the interest rate specified in Section 1. above shall be increased to four percent (4%) per annum.

9. Assignment. Holder may assign this Note and its rights and obligations herein, in whole or in part, to the SBA, the Treasury, a Facility or any purchaser or purchasers of this Note or any portion hereof. Maker may not assign any of its rights or obligations herein without the prior written consent of Holder.

10. Governing Law. This Note shall be governed by and construed under and in accordance with the laws of the State of Virginia. When the SBA is the Holder of this Note, this Note will be interpreted and enforced under federal law, including the SBA regulations. Payee or the SBA may use state or local procedures for filing papers, recording documents, giving notice and other purposes. By using such procedures, the SBA does not waive any federal immunity from state or local control, penalty, tax or liability. As to this Note, Maker may not claim or assert against the SBA any local or state law to deny any obligation, defeat any claim of the SBA, or preempt federal law.

11. Headings. The headings of the Sections of this Note are for convenience only and shall not be used to construe any provision hereof.

12. Severability. Any provision of this Note prohibited by the Act, the Rule or any Additional Rule, or any other laws of any jurisdiction shall be ineffective to the extent of such prohibition or modified to conform therewith, without invalidating the remaining provisions of this Note.

13. Binding Effect. This Note shall bind and inure to the benefit of the parties and their respective legal representatives, successors, and permitted assigns.

14. Waiver of Protest. Maker waives presentment, protest, notice of protest and non- payment, or other notice of default, notice of acceleration and intention to accelerate and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or by any indulgences, and hereby consents to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases or changes.

15. Rights and Waivers. No failure or delay on the part of Holder in exercising any right, power or privilege under this Note or the Loan Agreement, or under the Act, the Rule, any Additional Rule or any other applicable law shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No waiver or modification of any right, power or privilege of Holder or of any obligation of Maker shall be effective unless such waiver or modification is in writing, and signed by Holder and then only to the extent set forth therein. A waiver by Holder of any right, power, or privilege hereunder on any one occasion shall not be construed as a bar to, or waiver of, the exercise of any such right, power or privilege which Holder otherwise would have on any subsequent occasion.

16. Costs of Collection. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity, or in bankruptcy, receivership or other court proceedings, Maker agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys’ fees actually incurred by Holder, including all costs of appeal.

17. Additional Rules. As used in this Note, the term “Additional Rule” means any amendment to the Act; any additional federal statute altering or expanding the Rule; any Executive Order of the President of the United States altering or expanding the Rule; any official guidance, form, requirement, procedure, rule, regulation, reporting obligation, notice, program guide or other release by the SBA, the Treasury, a Facility or any other department, agency or administration of the United States Government altering or expanding the Rule or pertaining to, affecting or enabling forgiveness, purchase, repayment or other satisfaction of the principal balance of this Note at any time or from time to time and/or interest thereon (whether accrued or thereafter to accrue) on such principal balance.

18. Electronic Signatures. This Note may be executed by Maker via “wet” signature or electronic mark and may be delivered using a .pdf or similar file type transmitted via electronic mail, cloud-based server, e-signature technology or other similar electronic means (including, without limitation, use of an electronic signature service such as DocuSign.

IN WITNESS WHEREOF, Maker has duly endorsed this Note under seal on the 20th day of May , 2020.

	RPC Design & Manufacturing LLC
	Name of Maker
Principal Amount:

$ 205,200.00	By: /s/ Matt Nicosia (SEAL)
	Authorized Officer, Manager or Partner


	Matt Nicosia
	Print Name


	CEO
	Print Office Held

Method/Place of Payment

If payment made by mail:

Blue Ridge Bank, N.A.

PO Box 609

Luray VA 22835-0609

If payment made by wire transfer:

Blue Ridge Bank, N.A.

17 W. Main Street

Luray, VA 22835

ABA #051402372

Reference:

Account Holder

Account Number

If payment made by other method:

17 W. Main Street

Luray, VA 22835

Exhibit 4.6

LOAN AUTHORIZATION AND AGREEMENT (LA&A)

A PROPERLY SIGNED DOCUMENT IS

REQUIRED PRIOR TO ANY

DISBURSEMENT

CAREFULLY READ THE LA&A:

This document describes the terms and conditions of your loan. It is your responsibility to comply with ALL the terms and conditions of your loan.

SIGNING THE LA&A:

All borrowers must sign the LA&A.

· Sign your name exactly as it appears on the LA&A. If typed incorrectly, you should sign with the correct spelling.

· If your middle initial appears on the signature line, sign with your middle initial.

· If a suffix appears on the signature line, such as Sr. or Jr., sign with your suffix.

· Corporate Signatories: Authorized representatives should sign the signature page.

Your signature represents your agreement to comply

with the terms and conditions of the loan.

U.S. Small Business Administration

Economic Injury Disaster Loan

LOAN AUTHORIZATION AND AGREEMENT

Date: 05.22.2020 (Effective Date)

On the above date, this Administration (SBA) authorized (under Section 7(b) of the Small Business Act, as amended) a Loan (SBA Loan #1806077803) to Vivakor, Inc. (Borrower) of 2 PARK PLZ STE 800 IRVINE California 92614 in the amount of one hundred and fifty thousand and 00/100 Dollars ($150,000.00), upon the following conditions:

PAYMENT

Installment payments, including principal and interest, of $731.00 Monthly, will begin Twelve (12) months from the date of the promissory Note. The balance of principal and interest will be payable Thirty (30) years from the date of the promissory Note.

INTEREST

Interest will accrue at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date(s) of each advance.

PAYMENT TERMS

Each payment will be applied first to interest accrued to the date of receipt of each payment, and the balance, if any, will be applied to principal.

Each payment will be made when due even if at that time the full amount of the Loan has not yet been advanced or the authorized amount of the Loan has been reduced.

COLLATERAL

For loan amounts of greater than $25,000, Borrower hereby grants to SBA, the secured party hereunder, a continuing security interest in and to any and all “Collateral” as described herein to secure payment and performance of all debts, liabilities and obligations of Borrower to SBA hereunder without limitation, including but not limited to all interest, other fees and expenses (all hereinafter called “Obligations”). The Collateral includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto.

For loan amounts of $25,000 or less, SBA is not taking a security interest in any collateral.

REQUIREMENTS RELATIVE TO COLLATERAL

Borrower will not sell or transfer any collateral (except normal inventory turnover in the ordinary course of business) described in the "Collateral" paragraph hereof without the prior written consent of SBA.

Borrower will neither seek nor accept future advances under any superior liens on the collateral securing this Loan without the prior written consent of SBA.

USE OF LOAN PROCEEDS

Borrower will use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code (UCC) lien filing fees and a third-party UCC handling charge of $100 which will be deducted from the

Loan amount stated above.

REQUIREMENTS FOR USE OF LOAN PROCEEDS AND RECEIPTS

Borrower will obtain and itemize receipts (paid receipts, paid invoices or cancelled checks) and contracts for all Loan funds spent and retain these receipts for 3 years from the date of the final disbursement. Prior to each subsequent disbursement (if any) and whenever requested by SBA, Borrower will submit to SBA such itemization together with copies of the receipts.

Borrower will not use, directly or indirectly, any portion of the proceeds of this Loan to relocate without the prior written permission of SBA. The law prohibits the use of any portion of the proceeds of this Loan for voluntary relocation from the business area in which the disaster occurred. To request SBA's prior written permission to relocate, Borrower will present to SBA the reasons therefore and a description or address of the relocation site. Determinations of (1) whether a relocation is voluntary or otherwise, and (2) whether any site other than the disaster-affected location is within the business area in which the disaster occurred, will be made solely by SBA.

Borrower will, to the extent feasible, purchase only American-made equipment and products with the proceeds of this Loan.

Borrower will make any request for a loan increase for additional disaster-related damages as soon as possible after the need for a loan increase is discovered. The SBA will not consider a request for a loan increase received more than two (2) years from the date of loan approval unless, in the sole discretion of the SBA, there are extraordinary and unforeseeable circumstances beyond the control of the borrower.

DEADLINE FOR RETURN OF LOAN CLOSING DOCUMENTS

Borrower will sign and return the loan closing documents to SBA within 2 months of the date of this Loan Authorization and Agreement. By notifying the Borrower in writing, SBA may cancel this Loan if the Borrower fails to meet this requirement. The Borrower may submit and the SBA may, in its sole discretion, accept documents after 2 months of the date of this Loan Authorization and Agreement.

COMPENSATION FROM OTHER SOURCES

Eligibility for this disaster Loan is limited to disaster losses that are not compensated by other sources. Other sources include but are not limited to: (1) proceeds of policies of insurance or other indemnifications, (2) grants or other reimbursement (including loans) from government agencies or private organizations, (3) claims for civil liability against other individuals, organizations or governmental entities, and (4) salvage (including any sale or re-use) of items of damaged property.

Borrower will promptly notify SBA of the existence and status of any claim or application for such other compensation, and of the receipt of any such compensation, and Borrower will promptly submit the proceeds of same (not exceeding the outstanding balance of this Loan) to SBA.

Borrower hereby assigns to SBA the proceeds of any such compensation from other sources and authorizes the payor of same to deliver said proceeds to SBA at such time and place as SBA shall designate.

SBA will in its sole discretion determine whether any such compensation from other sources is a duplication of benefits. SBA will use the proceeds of any such duplication to reduce the outstanding balance of this Loan, and Borrower agrees that such proceeds will not be applied in lieu of scheduled payments.

DUTY TO MAINTAIN HAZARD INSURANCE

Within 12 months from the date of this Loan Authorization and Agreement the Borrower will provide proof of an active and in effect hazard insurance policy including fire, lightning, and extended coverage on all items used to secure this loan to at least 80% of the insurable value. Borrower will not cancel such coverage and will maintain such coverage throughout the entire term of this Loan. BORROWER MAY NOT BE ELIGIBLE FOR EITHER ANY FUTURE DISASTER ASSISTANCE OR SBA FINANCIAL ASSISTANCE IF THIS INSURANCE IS NOT MAINTAINED AS STIPULATED HEREIN THROUGHOUT THE ENTIRE TERM OF THIS LOAN. Please submit proof of insurance to: U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.

BOOKS AND RECORDS

Borrower will maintain current and proper books of account in a manner satisfactory to SBA for the most recent 5 years until 3 years after the date of maturity, including extensions, or the date this Loan is paid in full, whichever occurs first. Such books will include Borrower's financial and operating statements, insurance policies, tax returns and related filings, records of earnings distributed and dividends paid and records of compensation to officers, directors, holders of 10% or more of Borrower's capital stock, members, partners and proprietors.

Borrower authorizes SBA to make or cause to be made, at Borrower's expense and in such a manner and at such times as SBA may require: (1) inspections and audits of any books, records and paper in the custody or control of Borrower or others relating to Borrower's financial or business conditions, including the making of copies thereof and extracts therefrom, and (2) inspections and appraisals of any of Borrower's assets.

Borrower will furnish to SBA, not later than 3 months following the expiration of Borrower's fiscal year and in such form as SBA may require, Borrower's financial statements.

Upon written request of SBA, Borrower will accompany such statements with an 'Accountant's Review Report' prepared by an independent public accountant at Borrower's expense.

Borrower authorizes all Federal, State and municipal authorities to furnish reports of examination, records and other information relating to the conditions and affairs of Borrower and any desired information from such reports, returns, files, and records of such authorities upon request of SBA.

LIMITS ON DISTRIBUTION OF ASSETS

Borrower will not, without the prior written consent of SBA, make any distribution of Borrower’s assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.

EQUAL OPPORTUNITY REQUIREMENT

If Borrower has or intends to have employees, Borrower will post SBA Form 722, Equal Opportunity Poster (copy attached), in Borrower's place of business where it will be clearly visible to employees, applicants for employment, and the general public.

DISCLOSURE OF LOBBYING ACTIVITIES

Borrower agrees to the attached Certification Regarding Lobbying Activities

BORROWER’S CERTIFICATIONS

Borrower certifies that:

There has been no substantial adverse change in Borrower's financial condition (and organization, in case of a business borrower) since the date of the application for this Loan. (Adverse changes include, but are not limited to: judgment liens, tax liens, mechanic's liens, bankruptcy, financial reverses, arrest or conviction of felony, etc.)

No fees have been paid, directly or indirectly, to any representative (attorney, accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on SBA Form 5 Business Disaster Loan Application'; SBA Form 3501 COVID-19 Economic Injury Disaster Loan Application; or SBA Form 159, 'Compensation Agreement'. All fees not approved by SBA are prohibited.

All representations in the Borrower's Loan application (including all supplementary submissions) are true, correct and complete and are offered to induce SBA to make this Loan.

No claim or application for any other compensation for disaster losses has been submitted to or requested of any source, and no such other compensation has been received, other than that which Borrower has fully disclosed to SBA.

Neither the Borrower nor, if the Borrower is a business, any principal who owns at least 50% of the Borrower, is delinquent more than 60 days under the terms of any: (a) administrative order; (b) court order; or (c) repayment agreement that requires payment of child support.

Borrower certifies that no fees have been paid, directly or indirectly, to any representative (attorney, accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on the Loan Application. All fees not approved by SBA are prohibited. If an Applicant chooses to employ an Agent, the compensation an Agent charges to and that is paid by the Applicant must bear a necessary and reasonable relationship to the services actually performed and must be comparable to those charged by other Agents in the geographical area. Compensation cannot be contingent on loan approval. In addition, compensation must not include any expenses which are deemed by SBA to be unreasonable for services actually performed or expenses actually incurred. Compensation must not include charges prohibited in 13 CFR 103 or SOP 50-30, Appendix 1. If the compensation exceeds $500 for a disaster home loan or $2,500 for a disaster business loan, Borrower must fill out the Compensation Agreement Form 159D which will be provided for Borrower upon request or can be found on the SBA website.

Borrower certifies, to the best of its, his or her knowledge and belief, that the certifications and representations in the attached Certification Regarding Lobbying are true, correct and complete and are offered to induce SBA to make this Loan.

CIVIL AND CRIMINAL PENALTIES

Whoever wrongfully misapplies the proceeds of an SBA disaster loan shall be civilly liable to the Administrator in an amount equal to one-and-one half times the original principal amount of the loan under 15 U.S.C. 636(b). In addition, any false statement or misrepresentation to SBA may result in criminal, civil or administrative sanctions including, but not limited to: 1) fines, imprisonment or both, under 15 U.S.C. 645, 18 U.S.C. 1001, 18 U.S.C. 1014, 18 U.S.C. 1040, 18 U.S.C. 3571, and any other applicable laws; 2) treble damages and civil penalties under the False Claims Act, 31 U.S.C. 3729; 3) double damages and civil penalties under the Program Fraud Civil Remedies Act, 31 U.S.C. 3802; and 4) suspension and/or debarment from all Federal procurement and non-procurement transactions. Statutory fines may increase if amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

RESULT OF VIOLATION OF THIS LOAN AUTHORIZATION AND AGREEMENT

If Borrower violates any of the terms or conditions of this Loan Authorization and Agreement, the Loan will be in default and SBA may declare all or any part of the indebtedness immediately due and payable. SBA's failure to exercise its rights under this paragraph will not constitute a waiver.

A default (or any violation of any of the terms and conditions) of any SBA Loan(s) to Borrower and/or its affiliates will be considered a default of all such Loan(s).

DISBURSEMENT OF THE LOAN

Disbursements will be made by and at the discretion of SBA Counsel, in accordance with this Loan Authorization and Agreement and the general requirements of SBA.

Disbursements may be made in increments as needed.

Other conditions may be imposed by SBA pursuant to general requirements of SBA.

Disbursement may be withheld if, in SBA's sole discretion, there has been an adverse change in Borrower's financial condition or in any other material fact represented in the Loan application, or if Borrower fails to meet any of the terms or conditions of this Loan Authorization and Agreement.

NO DISBURSEMENT WILL BE MADE LATER THAN 6 MONTHS FROM THE DATE OF THIS LOAN AUTHORIZATION AND AGREEMENT UNLESS SBA, IN ITS SOLE DISCRETION, EXTENDS THIS DISBURSEMENT PERIOD.

PARTIES AFFECTED

This Loan Authorization and Agreement will be binding upon Borrower and Borrower's successors and assigns and will inure to the benefit of SBA and its successors and assigns.

RESOLUTION OF BOARD OF DIRECTORS

Borrower shall, within 180 days of receiving any disbursement of this Loan, submit the appropriate SBA Certificate and/or Resolution to the U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.

ENFORCEABILITY

This Loan Authorization and Agreement is legally binding, enforceable and approved upon Borrower’s signature, the SBA’s approval and the Loan Proceeds being issued to Borrower by a government issued check or by electronic debit of the Loan Proceeds to Borrower’ banking account provided by Borrower in application for this Loan.

_______________________________

______________________________________

James E. Rivera

Associate Administrator

U.S. Small Business Administration

The undersigned agree(s) to be bound by the terms and conditions herein during the term of this Loan, and further agree(s) that no provision stated herein will be waived without prior written consent of SBA. Under penalty of perjury of the United States of America, I hereby certify that I am authorized to apply for and obtain a disaster loan on behalf of Borrower, in connection with the effects of the COVID-19 emergency.

Vivakor, Inc.

_________________________________________ Date: 05.22.2020

Matthew Nicosia, Owner/Officer

Note: Corporate Borrowers must execute Loan Authorization and Agreement in corporate name, by a duly authorized officer. Partnership Borrowers must execute in firm name, together with signature of a general partner. Limited Liability entities must execute in the entity name by the signature of the authorized managing person.

CERTIFICATION REGARDING LOBBYING

For loans over $150,000, Congress requires recipients to agree to the following:

Appropriated funds may NOT be used for lobbying.

Payment of non-federal funds for lobbying must be reported on Form SF-LLL.

Language of this certification must be incorporated into all contracts and subcontracts exceeding $100,000.

All contractors and subcontractors with contracts exceeding $100,000 are required to certify and disclose accordingly.

CERTIFICATION REGARDING LOBBYING

Certification for Contracts, Grants, Loans, and Cooperative Agreements

Borrower and all Guarantors (if any) certify, to the best of its, his or her knowledge and belief, that:

(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, or modification of any Federal contract, grant, loan, or cooperative agreement.

(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal loan, the undersigned shall complete and submit Standard Form LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.

(3) The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and co-operative agreements) and that all sub-recipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000.00 and not more than $100,000.00 for each such failure.

This Statement of Policy is Posted

In Accordance with Regulations of the

Small Business Administration

This Organization Practices

Equal Employment Opportunity

We do not discriminate on the ground of race, color, religion, sex, age, disability or national origin in the hiring, retention, or promotion of employees; nor in determining their rank, or the compensation or fringe benefits paid them.

	This Organization Practices

	Equal Treatment of Clients

We do not discriminate on the basis of race, color, religion, sex, marital status, disability, age or national origin in services or accommodations offered or provided to our employees, clients or guests.

These policies and this notice comply with regulations of the

United States Government.

Please report violations of this policy to:

Administrator

Small Business Administration

Washington, D.C. 20416

In order for the public and your employees to know their rights under 13 C.F.R Parts 112, 113, and 117, Small Business Administration Regulations, and to conform with the directions of the Administrator of SBA, this poster must be displayed where it is clearly visible to employees, applicants for employment, and the public.

Failure to display the poster as required in accordance with SBA Regulations may be considered evidence of

noncompliance and subject you to the penalties contained in those Regulations.

Esta Declaración De Principios Se Publica

De Acuerdo Con Los Reglamentos De La

Agencia Federal Para el Desarrollo de la Pequeña Empresa

Esta Organización Practica

Igualdad Oportunidad De Empleo

No discriminamos por razón de raza, color, religión, sexo, edad, discapacidad o nacionalidad en el empleo, retención o ascenso de personal ni en la determinación de sus posiciones, salarios o beneficios marginales.

	Esta Organización Practica

	Igualidad En El Trato A Su Clientela

No discriminamos por razón de raza, color, religión, sexo, estado civil, edad, discapacidad o nacionalidad en los servicios o facilidades provistos para nuestros empleados, clientes o visitantes.

Estos principios y este aviso cumplen con los reglamentos del Gobierno de los Estados Unidos de América.

Favor de informar violaciones a lo aquí indicado a:

Administrador

Agencia Federal Para el Desarrollo de la

Pequeña Empresa

Washington, D.C. 20416

A fin de que el público y sus empleados conozcan sus derechos según lo expresado en las Secciones 112, 113 y 117 del Código de Regulaciaones Federales No. 13, de los Reglamentos de la Agencja Federal Para el Desarrollo de la Pequeña Empresa y de acuerdo con las instrucciones del Administrador de dicha agencia, esta notificación debe fijarse en un lugar claramente visible para los empleados, solicitantes de empleo y público en general. No fijar esta notificación según lo requerido por los reglamentos de la Agencia Federal Para el Desarrollo de la Pequeña Empresa, puede ser interpretado como evidencia de falta de cumplimiento de los mismos y conllevará la ejecución de los castigos impuestos en estos reglamentos.

NOTE

A PROPERLY SIGNED NOTE IS

REQUIRED PRIOR TO ANY

DISBURSEMENT

CAREFULLY READ THE NOTE: It is your promise to repay the loan.

· The Note is pre-dated. DO NOT CHANGE THE DATE OF THE NOTE.

· LOAN PAYMENTS will be due as stated in the Note.

· ANY CORRECTIONS OR UNAUTHORIZED MARKS MAY VOID THIS DOCUMENT.

SIGNING THE NOTE: All borrowers must sign the Note.

· Sign your name exactly as it appears on the Note. If typed incorrectly, you should sign with the correct spelling.

· If your middle initial appears on the signature line, sign with your middle initial.

· If a suffix appears on the signature line, such as Sr. or Jr., sign with your suffix.

· Corporate Signatories: Authorized representatives should sign the signature page.

U.S. Small Business Administration

NOTE

(SECURED DISASTER LOANS)

Date: 05.22.2020

Loan Amount: $150,000.00

Annual Interest Rate: 3.75%

SBA Loan # 1806077803

Application #3600183132

PROMISE TO PAY: In return for a loan, Borrower promises to pay to the order of SBA the amount of one hundred and fifty thousand and 00/100 Dollars ($150,000.00), interest on the unpaid principal balance, and all other amounts required by this Note.

DEFINITIONS: A) “Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. B) “Guarantor” means each person or entity that signs a guarantee of payment of this Note. C) “Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

PAYMENT TERMS: Borrower must make all payments at the place SBA designates. Borrower may prepay this Note in part or in full at any time, without notice or penalty. Borrower must pay principal and interest payments of $731.00 every month beginning Twelve (12) months from the date of the Note. SBA will apply each installment payment first to pay interest accrued to the day SBA receives the payment and will then apply any remaining balance to reduce principal. All remaining principal and accrued interest is due and payable Thirty (30) years from the date of the Note.

DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower: A) Fails to comply with any provision of this Note, the Loan Authorization and Agreement, or other Loan Documents; B) Defaults on any other SBA loan; C) Sells or otherwise transfers, or does not preserve or account to SBA’s satisfaction for, any of the Collateral or its proceeds; D) Does not disclose, or anyone acting on their behalf does not disclose, any material fact to SBA; E) Makes, or anyone acting on their behalf makes, a materially false or misleading representation to SBA; F) Defaults on any loan or agreement with another creditor, if SBA believes the default may materially affect Borrower’s ability to pay this Note; G) Fails to pay any taxes when due; H) Becomes the subject of a proceeding under any bankruptcy or insolvency law; I) Has a receiver or liquidator appointed for any part of their business or property; J) Makes an assignment for the benefit of creditors; K) Has any adverse change in financial condition or business operation that SBA believes may materially affect Borrower’s ability to pay this Note; L) Dies; M) Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without SBA’s prior written consent; or, N) Becomes the subject of a civil or criminal action that SBA believes may materially affect Borrower’s ability to pay this Note.

SBA’S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, SBA may: A) Require immediate payment of all amounts owing under this Note; B) Have recourse to collect all amounts owing from any Borrower or Guarantor (if any); C) File suit and obtain judgment; D) Take possession of any Collateral; or E) Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

SBA’S GENERAL POWERS: Without notice and without Borrower’s consent, SBA may: A) Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B) Collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If SBA incurs such expenses, it may demand immediate reimbursement from Borrower or add the expenses to the principal balance; C) Release anyone obligated to pay this Note; D) Compromise, release, renew, extend or substitute any of the Collateral; and E) Take any action necessary to protect the Collateral or collect amounts owing on this Note.

FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

GENERAL PROVISIONS: A) All individuals and entities signing this Note are jointly and severally liable. B) Borrower waives all suretyship defenses. C) Borrower must sign all documents required at any time to comply with the Loan Documents and to enable SBA to acquire, perfect, or maintain SBA’s liens on Collateral. D) SBA may exercise any of its rights separately or together, as many times and in any order it chooses. SBA may delay or forgo enforcing any of its rights without giving up any of them. E) Borrower may not use an oral statement of SBA to contradict or alter the written terms of this Note. F) If any part of this Note is unenforceable, all other parts remain in effect. G) To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that SBA did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. H) SBA may sell or otherwise transfer this Note.

MISUSE OF LOAN FUNDS: Anyone who wrongfully misapplies any proceeds of the loan will be civilly liable to SBA for one and one- half times the proceeds disbursed, in addition to other remedies allowed by law.

10.

BORROWER’S NAME(S) AND SIGNATURE(S): By signing below, each individual or entity acknowledges and accepts personal obligation and full liability under the Note as Borrower.

Vivakor, Inc.

_________________________________________

Matthew Nicosia, Owner/Officer

SECURITY AGREEMENT

Read this document carefully. It grants the SBA a security interest (lien) in all the property described in paragraph 4.

This document is predated. DO NOT CHANGE THE DATE ON THIS DOCUMENT.

U.S. Small Business Administration

SECURITY AGREEMENT

SBA Loan #:

1806077803

Borrower:

Vivakor, Inc.

Secured Party:

The Small Business Administration, an Agency of the U.S. Government

Date:

05.22.2020

Note Amount:

$150,000.00

DEFINITIONS.

Unless otherwise specified, all terms used in this Agreement will have the meanings ascribed to them under the Official Text of the Uniform Commercial Code, as it may be amended from time to time, (“UCC”). “SBA” means the Small Business Administration, an Agency of the U.S. Government.

GRANT OF SECURITY INTEREST.

For value received, the Borrower grants to the Secured Party a security interest in the property described below in paragraph 4 (the “Collateral”).

OBLIGATIONS SECURED.

This Agreement secures the payment and performance of: (a) all obligations under a Note dated 05.22.2020, made by Vivakor, Inc. , made payable to Secured Lender, in the amount of $150,000.00 (“Note”), including all costs and expenses (including reasonable attorney’s fees), incurred by Secured Party in the disbursement, administration and collection of the loan evidenced by the Note; (b) all costs and expenses (including reasonable attorney’s fees), incurred by Secured Party in the protection, maintenance and enforcement of the security interest hereby granted; (c) all obligations of the Borrower in any other agreement relating to the Note; and (d) any modifications, renewals, refinancings, or extensions of the foregoing obligations.

COLLATERAL DESCRIPTION.

The Collateral in which this security interest is granted includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto.

RESTRICTIONS ON COLLATERAL TRANSFER.

Borrower will not sell, lease, license or otherwise transfer (including by granting security interests, liens, or other encumbrances in) all or any part of the Collateral or Borrower’s interest in the Collateral without Secured Party’s written or electronically communicated approval, except that Borrower may sell inventory in the ordinary course of business on customary terms. Borrower may collect and use amounts due on accounts and other rights to payment arising or created in the ordinary course of business, until notified otherwise by Secured Party in writing or by electronic communication.

MAINTENANCE AND LOCATION OF COLLATERAL; INSPECTION; INSURANCE.

Borrower must promptly notify Secured Party by written or electronic communication of any change in location of the Collateral, specifying the new location. Borrower hereby grants to Secured Party the right to inspect the Collateral at all reasonable times and upon reasonable notice. Borrower must: (a) maintain the Collateral in good condition; (b) pay promptly all taxes, judgments, or charges of any kind levied or assessed thereon; (c) keep current all rent or mortgage payments due, if any, on premises where the Collateral is located; and (d) maintain hazard insurance on the Collateral, with an insurance company and in an amount approved by Secured Party (but in no event less than the replacement cost of that Collateral), and including such terms as Secured Party may require including a Lender’s Loss Payable Clause in favor of Secured Party. Borrower hereby assigns to Secured Party any proceeds of such policies and all unearned premiums thereon and authorizes and empowers Secured Party to collect such sums and to execute and endorse in Borrower’s name all proofs of loss, drafts, checks and any other documents necessary for Secured Party to obtain such payments.

CHANGES TO BORROWER’S LEGAL STRUCTURE, PLACE OF BUSINESS, JURISDICTION OF ORGANIZATION, OR NAME.

Borrower must notify Secured Party by written or electronic communication not less than 30 days before taking any of the following actions: (a) changing or reorganizing the type of organization or form under which it does business; (b) moving, changing its place of business or adding a place of business; (c) changing its jurisdiction of organization; or (d) changing its name. Borrower will pay for the preparation and filing of all documents Secured Party deems necessary to maintain, perfect and continue the perfection of Secured Party’s security interest in the event of any such change.

PERFECTION OF SECURITY INTEREST.

Borrower consents, without further notice, to Secured Party’s filing or recording of any documents necessary to perfect, continue, amend or terminate its security interest. Upon request of Secured Party, Borrower must sign or otherwise authenticate all documents that Secured Party deems necessary at any time to allow Secured Party to acquire, perfect, continue or amend its security interest in the Collateral. Borrower will pay the filing and recording costs of any documents relating to Secured Party’s security interest. Borrower ratifies all previous filings and recordings, including financing statements and notations on certificates of title. Borrower will cooperate with Secured Party in obtaining a Control Agreement satisfactory to Secured Party with respect to any Deposit Accounts or Investment Property, or in otherwise obtaining control or possession of that or any other Collateral.

DEFAULT.

Borrower is in default under this Agreement if: (a) Borrower fails to pay, perform or otherwise comply with any provision of this Agreement; (b) Borrower makes any materially false representation, warranty or certification in, or in connection with, this Agreement, the Note, or any other agreement related to the Note or this Agreement; (c) another secured party or judgment creditor exercises its rights against the Collateral; or (d) an event defined as a “default” under the Obligations occurs. In the event of default and if Secured Party requests, Borrower must assemble and make available all Collateral at a place and time designated by Secured Party. Upon default and at any time thereafter, Secured Party may declare all Obligations secured hereby immediately due and payable, and, in its sole discretion, may proceed to enforce payment of same and exercise any of the rights and remedies available to a secured party by law including those available to it under Article 9 of the UCC that is in effect in the jurisdiction where Borrower or the Collateral is located. Unless otherwise required under applicable law, Secured Party has no obligation to clean or otherwise prepare the Collateral for sale or other disposition and Borrower waives any right it may have to require Secured Party to enforce the security interest or payment or performance of the Obligations against any other person.

10.

FEDERAL RIGHTS.

When SBA is the holder of the Note, this Agreement will be construed and enforced under federal law, including SBA regulations. Secured Party or SBA may use state or local procedures for filing papers, recording documents, giving notice, enforcing security interests or liens, and for any other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax or liability. As to this Agreement, Borrower may not claim or assert any local or state law against SBA to deny any obligation, defeat any claim of SBA, or preempt federal law.

11.

GOVERNING LAW.

Unless SBA is the holder of the Note, in which case federal law will govern, Borrower and Secured Party agree that this Agreement will be governed by the laws of the jurisdiction where the Borrower is located, including the UCC as in effect in such jurisdiction and without reference to its conflicts of laws principles.

12.

SECURED PARTY RIGHTS.

All rights conferred in this Agreement on Secured Party are in addition to those granted to it by law, and all rights are cumulative and may be exercised simultaneously. Failure of Secured Party to enforce any rights or remedies will not constitute an estoppel or waiver of Secured Party’s ability to exercise such rights or remedies. Unless otherwise required under applicable law, Secured Party is not liable for any loss or damage to Collateral in its possession or under its control, nor will such loss or damage reduce or discharge the Obligations that are due, even if Secured Party’s actions or inactions caused or in any way contributed to such loss or damage.

13.

SEVERABILITY.

If any provision of this Agreement is unenforceable, all other provisions remain in effect.

14.

BORROWER CERTIFICATIONS.

Borrower certifies that: (a) its Name (or Names) as stated above is correct; (b) all Collateral is owned or titled in the Borrower’s name and not in the name of any other organization or individual; (c) Borrower has the legal authority to grant the security interest in the Collateral; (d) Borrower’s ownership in or title to the Collateral is free of all adverse claims, liens, or security interests (unless expressly permitted by Secured Party); (e) none of the Obligations are or will be primarily for personal, family or household purposes; (f) none of the Collateral is or will be used, or has been or will be bought primarily for personal, family or household purposes; (g) Borrower has read and understands the meaning and effect of all terms of this Agreement.

15.

BORROWER NAME(S) AND SIGNATURE(S).

By signing or otherwise authenticating below, each individual and each organization becomes jointly and severally obligated as a Borrower under this Agreement.

Vivakor, Inc.

_______________________________________ Date: 05.22.2020

Matthew Nicosia, Owner/Officer

Exhibit 10.10

SUB-CONTRACT AGREEMENT

FOR

Remediation of oily sludge material in KOC SEK Fields {Lot - C)

BETWEEN

BETWEEN

[ ]

AND

VIVAKOR-ME

(SUB-CONTRACT No. )

SUB-CONTRACT AGREEMENT

This SUB-CONTRACT AGREEMENT ("AGREEMENT") for oily sludge material remediation services is made and entered into as on 07/12/2019 (the "Effective Date"), by and between:

(a)	[ ], having its registered address at [ ], hereinafter referred to as "[ ]" (the "CONTRACTOR"); and and

(b)	VIVAKOR MIDDLE EAST, a company organized and existing under the laws of the State of Qatar and having its registered address at Al Mana Twin Towers, CR Number 74308 hereinafter referred to as "VIVAKOR-ME" (the "SUB-CONTRACTOR" ).

1.	Scope of Work:

[ ] and Vivakor-ME, agree to cooperate on a pilot up to 1,000 cubic meters for KOC's Soil Remediation program to allow for Vivakor-ME to prove its technology on KOC sludge/soil.

By agreeing to cooperate on a pilot of 1,000 cubic meters for KOC's Soil Remediation program, Vivakor ME agrees not to burden [ ] with any legal or financial responsibility for the pilot program and [ ]also agrees not to burden Vivakor-ME with any legal or financial responsibility for the pilot program.

[ ] will seek approval from KOC to have Vivakor-ME as a sub-contractor. [ ] will also seek approval from KOC to allow for Vivakor-ME to operate from the site currently occupied by TERI & process sludge from that site as Vivakor-ME's machinery &equipment is fully set-up and installed on that site.

Should KOC insist that Vivakor-ME work using [ ]'s sludge, Vivakor-ME is ready and willing to truck the sludge from site to the site currently occupied by TERI.

[ ] will not contribute financially to this pilot program; all costs are to be borne by Vivakor-ME.

[ ] will, also help by providing a safety officer and a site supervisor on site.

In turn, Vivakor-ME will not absorb any outstanding legal or financial commitments that are currently held by .

[ ] will not have any responsibility with Vivakor-ME either in the event that the trial is satisfactory or in the event that it unsuccessful.

2.	Indemnification

2.1

SUB-CONTRACTOR agrees to indemnify, hold harmless, and defend CONTRACTOR, its officers, directors, members, agents, representatives employees from any and all liabilities, claims, damages, penalties, fines, forfeitures, suits and the cost incidents thereto caused by SUB-CONTRACTOR or its officers, directors, agentsor employees, negligent or willful acts or omissions in the performance of work or by the breach of any term or provisions set forth in the Agreement.

2.2

CONTRACTOR agrees to indemnify, hold harmless, and defend SUB-CONTRACTOR, its officers, directors, members, agents, representatives employees from any and all liabilities, claims, damages, penalties, fines, forfeitures, suits and the cost incidents thereto caused by CONTRACTOR or its officers, directors, agents or employees, negligent or willful acts or omissions in the performance of work or by the breach of any term or provisions set forth in the Agreement.

IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto have executed this AGREEMENT as of the day and year first written above:

For and on behalf of the CONTRACTOR	For and on behalf of the SUB-CONTRACTOR

[ ]	VIVAKOR MIDDLE EAST

	____________________________ Name Title:

Exhibit 10.11

SUB-CONTRACT AGREEMENT

FOR

Remediation of oily sludge material In KOC SEK Fields (Lot - C)

BETWEEN

THE ENERGY AND RESOURCES INSTITUTE (TERI)

AND

VIVAKOR MIDDLE EAST (VIVIKME)

SUB-CONTRACT No. 01-2018

SUB-CONTRACT AGREEMENT

This SUB-CONTRACT AGREEMENT (“AGREEMENT”) for oily sludge material remediation services is made and entered into as on February 6th, 2018 (the “Effective Date”), by and between:

(a)	The Energy and Resources Institute, having its registered address at Darbari Seth Block, IHC Complex , Lodhi Road, New Delhi -110 003, hereinafter referred to as "TERI" (the "CONTRACTOR"); and
(b)	VIVAKOR MIDDLE EAST, a company organized and existing under the laws of the State of Qatar and having its registered address at Al Mana Twin Towers, CR Number 74308 hereinafter referred to as “VIVAKOR MIDDLE EAST” (the "SUB-CONTRACTOR" ).

(Hereinafter referred singly as 'Party' and collectively 'Parties')

WITNESSETH:

WHEREAS, TERI has been awarded a Project by Kuwait Oil Company (K.O.C), Kuwait (hereinafter the 'Client') vide contract no. 12050840, for undertaking soil remediation activities in Kuwait; and

WHEREAS, the SUB-CONTRACTOR has submitted, and the CONTRACTOR has accepted, a proposal to perform oily sludge material remediation services forming part of the Project, upon the terms and conditions hereinafter contained.

NOW, THEREFORE, In consideration of the premises and of the mutual covenants and the agreement of the parties herein expressed , the Parties hereto agree as follows:

Scope of Work:

The SUB-CONTRACTOR's scope of work includes the following:

	a)	Design of the sludge treatment plant and equipment suitable for remediation of the sludge material.
	b)	Preparing and getting approved by KOC all documents and drawings as per the requirements of KOC. This Includes but is not limited to project execution plan, technology write-up, work method statements for various activities, procedures for installation, commissioning and demobilization of the plant and equipment, lifting plans, site plans,commissioning plans, wiring diagrams and other drawings etc . that may be demanded by KOC.
	c)	All work related to preparation of the site for installation of the treatment plant and equipment, including any foundation, temporary structures, lighting arrangement, water supply, sewage disposal facility etc.
	d)	Installation, commissioning, operation and maintenance of the plant and equipment required for sludge treatment work. All machinery like cranes, fork lift, loaders, excavators, trucks etc. required for this as well as manpower required for this will be arranged by VIVAKOR MIDDLE EAST.
	e)	Performing remediation and related services for the entire quantity of oily sludge material as shown in Annexure 1 such that remediated material meets the KOC Primary Ecotoxicity standards as given in Annexure 2
	f)	Any waste water generated must be treated to meet KOC Irrigation water standards as given in Annexure 3. Any other waste or by-product that is generated by the treatment process must also be treated to meet KOC standards All of these must be disposed of as directed by KOC and in accordance with KOC procedures
	g)	All fuel, water, electricity, lighting etc. required for the treatment process will be arranged by VIVAKOR MIDDLE EAST at their own cost All material, labour, equipment and tools required by the company for installation, commissioning, operation, maintenance and demobilization of their Plant(s) will be arranged for by VIVAKOR MIDDLE EAST

	h)	Any recovered oil may be recycled back by VIVAKOR MIDDLE EAST for using in their treatment process. However any oil finally left over after the treatment is over, must have a BS&W less than 20% and disposed of as directed by KOC, and in accordance with KOC procedures.
	i)	The residual solids remaining after treatment must meet KOC Primary Ecotoxicity standards.
	j)	There should not be any waste by-product(s) or toxic air released from the treatment process into the atmosphere or ground. Air quality monitoring will have to be done if any gases are released into the atmosphere as a result of the treatment process and the required environment standards will have to be met
	k)	Demobilization of the plant and equipment setup for sludge treatment work. After demobilization, the site should be clean and in the same condition as when it was taken over for installation of the equipment. Any machinery like cranes, fork lift loaders, excavators, trucks etc. required for this will be arranged by VIVAKOR MIDDLE EAST
	l)	Adhere to the deadlines/timelines set forth in Annexure 4 - Schedule for completion of Sludge Treatment Work.

2.	SUB·CONTRACTOR's responsibilities:

	a)	SUB-CONTRACTOR shall provide all labour, material, equipment and services necessary to perform the work as specified in Clause 1 above and shall undertake such work in accordance with the requirements of the KOC tender document (as specified in Annexure 5).
	b)	SUB-CONTRACTOR shall initially undertake a trial for treatment of 1000 cubic meters of sludge material free of cost within a period of Hundred and twenty (120) days from the date of signing of this Agreement, such time frame may adjust due to overseas shipping, permits, clearances from KOC, and is subject to change. The trial will be done for representative types of sludge like dry sludge, wet sludge etc taken from different locations in the sludge piles. If the trial is completed within the treatment deadlines specified In this Agreement and is declared successful by TERI and KOC, the sub-contractor will be paid for the trial and then only will the SUB-CONTRACTOR be permitted to treat the remaining quantity of sludge material. In such case, the SUB-CONTRACTOR agrees to undertake treatment of the remaining quantity of sludge material. In such case, the SUB-CONTRACTOR agrees to undertake treatment of the remaining quantity of sludge material at the same price and under the same terms and conditions as are contained in this Agreement.
	c)	All people engaged by VIVAKOR MIDDLE EAST whether from Kuwait or from abroad, must have a visa or Kuwaiti Civil ID of the local agent of VIVAKOR MIDDLE EAST.
	d)	SUB-CONTRACTOR, with TERI assistance, shall obtain necessary Kuwai t EPA clearance for any chemicals that are to be imported and used in Kuwait
	e)	SUB-CONTRACTOR shall set up the following facilities at site in addition to their Plant if needed, and if not will use TERI existing facilities

		·	Porta Cabins and other facilities for staff like lunch room, pantry, washroom, shower room
		·	General lighting of the area with Tower Lights if night working is involved
		·	Electricity supply through DG sets
		·	Any other item that may be necessary as per treatment procedure and KOC Instructions

	f)	SUB-CONTRACTOR shall arrange for customs clearance of any equipment imported into Kuwait and arrange visas for the personnel of VIVAKOR MIDDLE EAST.
	g)	SUB-CONTRACTOR shall be responsible for obtaining all necessary permissions for executing the work, and TERI will assist if requested, including but not limited to:

		i	Gate passes for employees and vehicles
		ii	Work permits from KOC for their personnel,
		iii	Safety and third party inspection certificates for equipment and vehicles entering KOC
		iv	Temporary Construction Permits;
		v	Environmental permits
		vi	Loading notes for taking out items from KOC site

	h)	SUB-CONTRACTOR shall provide all personnel required for safe and efficient installation, commissioning, working and demobilization of the company equipment. The staffing pattern will have to take into account the statutory personnel required by KOC. This will include as a minimum provision of a safety officer and work site supervisor in each shift,in addition to any supervisory and operation/maintenance staff that may be required. The CVs of some key personnel may have to be approved by KOC. These key persons shall not be withdrawan or replaced by the company without the prior approval ot TERI/KOC.
	i)	SUB-CONTRACTOR shall provide any telephone, internet connection, computers etc. required when undertaking the work.
	j)	Conduct any Hazop/Hazid study if so required by KOC.
	k)	Conduct Environment monitoring activities if so required by KOC.
	l)	Maintain a daily log of work done and submit weekly as well as monthly progress reports as per format to be decided between TERI and the subcontractor
	m)	Engage a local agent who will carry out all formalities for import of items, customs clearance, visas for staff of VIVAKOR MIDDLE EAST, EPA clearance etc.
	n)	Follow all procedures and instructions laid down by KOC for day to day working.
	o)	Skill and Ability. SUB-CONTRACTOR agrees to provide and furnish skill and judgment in the performance of the Work in a manner consistent with that degree of skill and care ordinarily exercised by similarly situated members of SUB-CONTRACTOR’S profession.
	p)	SUB-CONTRACTOR agrees to perform in a timely manner of all its Work efficiently and with the requisite expertise, skill, competence, and ability, to satisfy the requirements of the Contract Documents and Project schedule requirements, and to cooperate with TERI so that TERI may fulfill its obligations to its Cliients.
	q)	SUB-CONTRACTOR shall comply with all applicable safety laws and regulations including, but not limited to, federal and state occupational, safety and health acts, in particular the applicable provisions of OSHA. If required by TERIM SUB-CONTRACTOR shall comply with the more stringent of those safety programs and procedures.
	r)	SUB-CONTRACTOR agrees to abide by both its own internal Health and Safety and Quality Control Plans as well as by TERI’S Health and Safety and Quality Control Plans. SUB-CONTRACTOR warrants that the Work will be free from any defects in equipment, material, design, or workmanship performed by SUB-CONTRACTOR.
	s)	PPE. The SUB-CONTRACTOR shall provide its own Personal Protective Equipment (PPE)
	t)	Correction of Defective Work. SUB-CONTRACTOR agrees to correct any Work that is found not to be in conformance with the requirements of the Contract Documents within a period of one year from the date of delivery of SUB-CONTRACTOR’S final report.
	u)	Vivkor Middle East Reserves the rights to mix different materials for more efficient processing as needed.
	v)	Final Completion Date. SUB-CONTRACTOR is required to complete all of its work within the time requirements and prior to the date for final completion as give in Annnexure 4 - Schedule for completion of Sludge Treatment Work, time being of the essence.
	w)	All the works and related activities mentioned in clause 1 and 2 above will be undertaken by the SUB-CONTRACTOR at his/her own cost.

3.	TERI’s responsibilities:

	a)	Provide space at site for installation of the equipment of VIVAKOR MIDDLE EAST
	b)	Provide one room in a porta-cabin at site of work, along with electricity and furniture
	c)	Provide one Project Manager, one Safety Engineer and one - Permit Applicant in day shift.
	d)	Assist VIVAKOR MIDDLE EAST in getting gate passes, loading notes, permits etc from KOC

	e)	Testing of all treated material will be the responsibility of TERI, For all purposes, only the KOC approved laboratory test results will be considered for acceptance of the successful treatment. The testing will be done by the KOC approved laboratory based on samples taken by TERI according to a sampling plan approved by KOC. KOC may take independent samples of the treated material for testing. TERI as well as the KOC samples must pass the tests and the results of the tests must be accepted by KOC in order to declare the treatment as being successful. Billing can be done by VIVAKOR MIDDLE EAST only after the test results have been declared successful.
	f)	Teri will be responsible for demobilization for the site except Vivakor Middle East Assets.

4.	Sub-Contract Price

4.1	Upon successful completion of the trial for treatment of 1000 cubic meters of sludge material and receipt of fee from KOC for the same, TERI will pay to VIVAKOR MIDDLE EAST US$ Seventy-two (USD 72) per cubic meter of successfully treated sludge, such payment to be made within 15 (fifteen) days of receipt of fee from KOC for successfully treated sludge. However, Vivakor Middle East reserves the rights to penalize TERI for any late payments other than agreed. This fee is inclusive of all taxes, levies and charges etc. In case any quantify out of the 1000 cubic meters of the sludge treated in the above trial does not meet the remediation criteria set forth by KOC, then no payment will be made to VIVAKOR MIDDLE EAST. Passing of a partial quantity or passing of only some of the type of sludge will not be considered as a success of the treatment process. If a sample of treated sludge fails in testing during this trial then VIVKOR MIDDLE EAST will be given an opportunity to give another sample for testing from the same batch of treated material. If the second sample also fails, then the treatment process will be deemed as a failure and the trial will be abandoned. No further treatment of sludge will be done. In such a case VIVAKOR MIDDLE EAST agrees to demobilize its plant and equipment and this Agreement shall stand terminated.
4.2	In case the trial is successful and 1000 cubic
4.3	TERI will deduct 5% of invoice amount as retaining Tax and same will be returned to VIVAKOR MIDDLE EAST after submission of Tax clearance issued by Kuwait government to Vivakor Middle East.

5.	Commencement date of Works and Work Completion Deadline

5.1	The parties agree that the date for commencement of work by SUB-CONTRACTOR is the Effective Date and the entire works shall be completed as per the timelines given in Annexure 4 - Schedule for completion of Sludge Treatment Work.

6.	Liquidated Damages

6.1	The Rate of the Liquidated Damages shall be KWD400/- per day of delay beyond the Date of Completion specified i.e. in Annexure 4. The SUB-CONTRACTOR understands and agrees to comply with timelines given in Annexure 4 - Schedule for completion of Sludge Treatment Work. However, the subcontractor is not responsible for delays caused by TERI or KOC.
6.2	The SUB-CONTRACTOR understands and agrees that the sludge treatment system has to be installed sufficiently in advance to comply with the schedule as outlined in Annexure 4.
6.3	TERI has the right to pursue all available remedies in the event of any delays to the works caused in whole or in part by the acts of commission/omission of the SUB-CONTRACTOR.

7.	Termination

7.1

Each Party is entitled to terminate this Agreement by giving written notice to the other if that other Party commits a material breach of this Agreement and fails to remedy that breach within thirty (30) days of being required to do so following written notice served on the Party that has committed the breach.

7.2

Notwithstanding the provisions of this Agreement, either party shall be entitled to terminate this Agreement immediately if the other Party is involved in any legal proceedings concerning its solvency, enters into liquidation, whether compulsory or voluntary, other than for the purposes of an amalgamation or reconstruction, makes an arrangement with its creditors, becomes subject to an administration order or has receiver or manager appointed over all or any part of its assets.

7.3	Upon termination for any reason, VIVAKOR MIDDLE EAST will be paid for the sludge quantity treated till the date of termination. No other payment will be due. VIVAKOR MIDDLE EAST must remove its equipment and clear the site within thirty (30) days of termination of this Agreement..

8.	Indemnification

8.1

SUB-CONTRACTOR agrees to indemnify, hold harmless, and defend CONTRACTOR, its officers, directors, members, agents, representatives employees from any and all liabilities, claims, damages, penalties, fines, forfeitures, suits and the cost incidents thereto caused by SUB-CONTRACTOR or its officers, directors, agents or employees, negligent or willful acts or omissions in the performance of work or by the breach of any term or provisors set forth in the agreement.

8.2

CONTRACTOR agrees to indemnify, hold harmless, and defend SUB-CONTRACTOR, its officers, directors, members, agents, representatives employees form any and all liabilities, claims, damages, penalties, fines, forfeitures, suits and the cost incidents thereto caused by CONTRACTOR or its officers, directors, agents or employees, negligent or willful acts or omissions in the performance of work or by the breach of any term or provisors set forth in the Agreement.

9.	Assignment

9.1	SUB-CONTRACTOR shall not be entitled to assign all or any part of its obligations under this Agreement without the prior written consent of the CONTRACTOR

10.

Force Majeure

10.1	No delay or failure in performance by either Party hereto shall constitute default hereunder or give rise to any claim for damages if, and to the extent, such delay or failure is caused by force majeure. Unless such force majeure substantially frustrates performance of the Agreement, force majeure shall not operate to excuse, but only to delay performance.
10.2	In this Agreement, Force Mjeure shall mean any cause preventing a party (the “Affected Party”) from performing any or all of its obligations which arises from or is attributable to acts, events, omissions or accidents beyond the reasonable control of the Affected Party, including but not limited to acts of the public enemy; expropriation or confiscation of facilities; changes or compliance with any applicable law, government order, rule, regulation or direction; war, rebellion, civil disturbances, sabotoge, riots, floods, unusually severe weather that could not reasonably have been anticipated, fires or other catastrophes; strikes or other concerted acts of employees, lockouts; and other similar occurrences.
10.3	If SUB-CONTRACTOR is delayed in performance of Work by force majeure, SUB-CONTRACTOR shall promptly notify CONTRACTOR about the existence of force majeure and shall have no liability in respect of any delay in performance or any non-performance of any obligation under this agreement.
10.4	SUB-CONTRACTOR shall make reasonable efforts to minimize the effects of force majeure on the work schedule and completion.

11.

Dispute Resolution

11.1

The parties shall use their best efforts to negotiate in good faith and settle amicably any dispute that may arise out of, or relate to, this Agreement (or its construction, validity or termination (a “Dispute”).

11.2

If a Dispute cannot be settled through negotiations between appropriate representatives from each of the parties, either Party may give to the other a notice in writing (a “Dispute Notice”). Within seven (7) days of the Dispute Notice being given, the parties shall each refer the Dispute to the senior representatives nominated by the chief executive officer of each Party, who shall meet in order to attempt to resolve the Dispute. If the Dispute is not settled by agreement in writing between the parties within fourteen (14) days of the Dispute Notice, it shall be resolved in accordance with the provisions given in Clause 12.

12.

Governing Law and Arbitration

12.1

This Agreement is governed by, and shall be construed in accordance with, the laws of the State of Kuwait. All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this agreement, or for the breach thereof, which cannot be resolved amicably shall be finally settled by a Court of competent jurisdiction in Kuwait.

13.

Specific Terms and Conditions

13.1	This Agreement and its Annexes shall together constitute the entire agreement between the Parties and shall supersede all communications, negotiations and agreements of the Parties made prior to the date of this Agreement.
13.2	All documents forming part of this Agreement are intended to be correlative, complementary and mutually explanatory of one another.
13.3	Address for Communication
	All important communications and contractual notices pursuant to or in connection with this Agreement shall be communicated in writing in the English Language as set forth below.

To TERI:

Ashok Kumar Saxena

CEO

TERI KOC PROJECT

c/o DELHAM General Trading Contracting Co.

AlAwaqafComplex, Tower 17

10th Floor, Office 32 and 33

P.O. Box 25375, Safat-13114 Kuwait

Email: ashok.saxana@teri-kocproj.org

To VIVAKOR MIDDLE EAST:

Garen Kolajian

General Manager

c/o Triu Valley Trading and Contracting W.I.I.

Al Mana Twin Towers, 5th Floor;

P.O. Box 36:20, Doha-Qatar;

Email: Garen@trivalleygatar.com

TERI and VIVAKOR MIDDLE EAST may notify the other of any change to the address or any other details specified in this section provided that such notification shall only be effective from the date specified in such notice.

14.

Translation

14.1	This Agreement is executed in English. In the event this Agreement is translated into a language or languages other than English, this version in English shall be controlling on all questions or interpretations and performance.

IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto have executed this AGREEMENT as of the day and year first written above.

For and on behalf of the CONTRACTOR	For and on behalf of the SUB-CONTRACTOR
The Energy and Resources Institute	VIVAKOR MIDDLE EAST

/s/ Ashok Kumar Saxena	/s/ Matt Nicosia
Name: Ashok Kumar Saxena	Name: Matt Nicosia
Title: CEO TERI-KOC PROJECT	Title: Partner, CEO


Witness: /s/ Puneet Chandra
Puneet Chandra	Witness: /s/

Annexes:

Annexure 1: Material to be treated

Annexure 2: KOC Primary Ecotoxicity standards

Annexure 3: KOC Irrigation standards

Annexure 4: Schedule for Completion of Sludge Treatment Work

Annexure 5: Requirements as per KOC tender document

Annexure 1: Material to be treated

The material to be remedied is oily sludge which has been lying exposed to weather for several years. It is mostly in solid form but a small amount may turn into viscous liquid when the ambient temperature is high. A few pictures of the sludge are attached. The material is lying in two heaps at the project site inside KOC. It is to be treated within KOC premises and cannot be taken out for treatment. The matarial will be offered by TERI for treatment on “as is where is basis”. Both Parties will jointly measure and agree upon the total quantify of material (in cubic meters) to be treated before commencement of work.

Measurement

Measurement of the sludge material volume will be e done by stock piling up and using survey equipment to calculate the volume. Where the sludge is too fluid to stack it into geometrical shape, it will be collected in a holding pit made by restraining bund walls and survey will be done to calculate the volume.

Annexure 2: Primary Ecotocity standards

Annexure 4: Schedule for completion of Sludge Treatment Work

March 2017 - Commencement assembly and shipping of plant/unit for sludge remediation

May 2017 - Site Prep- Arrival of Unit and clearance from Customs.

June 2017 - Mobilization

July 2018 - Commencement of sludge treatment work (first 1000)

Nov 2018 - Completion of remediation of entire amount of sludge

December 2018 - Unit removal/Demobilization (latest by 31st December 2018)

Vivakor Middle East shall not be held responsible if out of control and serious uncounted issues arise from Customs or mobilization processes.

In the event that local vendor condensate is not approved, Vivakor Middle East reserves the right to change the timelines as required to get the approvals for the appropriate condensate requirements stated by KOC.

Should KOC require extensive infrastructure improvements such as concrete containment rings this will also require adjustments in the time line, hence Vivakor Middle East reserves the rights to do so.

Annexure 5: Requirements as per KOC tender document

Exhibit 10.12

OPTION AGREEMENT

This Option Agreement (this "Agreement"), dated as of July 9th, 2019 (the "Effective Date"), is entered into between Tar Sands Holdings II, LLC, a Utah limited liability company ("Optionor''), and Vivakor, Inc., a Nevada corporation ("Optionee").

RECITALS

WHEREAS, Optionor is the owner of that certain real property particularly described in Exhibit A attached hereto (the "Property"), including all appurtenances, rights and benefits pertaining to the Property, and any and all Permits (as defined below) to which the Property is subject; and of the improvements and equipment located on the Property (the "Assets"); and

WHEREAS, Optionor wishes to grant to Optionee, and Optionee wishes to obtain from Optionor, an irrevocable and exclusive option to purchase the Property, the Permits (to the extent transferrable) and the Assets during the "Option Term" (as defined below), subject to the terms and conditions set forth below, which terms and conditions shall include, among other things, the entitlement of Optionor to enter into one or more back-up offers and to enter into a "Refinery Property Transaction" (as defined below).

NOW, THEREFORE, in consideration of the Option Payment and the other mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Option. Subject to Optionee's timely payment of the Option Payment (as defined below), and on the terms and conditions set forth herein, Optionor hereby grants to Optionee an option to purchase the Property, the Assets and all Permits, insofar as such Permits are transferable (the "Option").

2. Option Term. The term of the Option ("Option Term") shall commence on the Effective Date and automatically expire on the date that is twelve (12) months after the Effective Date ("Option Termination Date"), unless duly extended, exercised or sooner terminated as provided below in this Agreement.

3. Option Consideration.

Option Payment. The Option is granted in consideration of Optionee's payment to Optionor of the amount of Two Hundred Thousand Dollars ($200,000.00) ("Option Payment"), in the incremental payments described below, payable by Optionee's wire transfer of such Option Payment to an account designated by Optionor. Such Option Payment shall be due and payable in the following increments: (i) simultaneous with the execution and delivery of this Agreement, Optionee is paying to Optionor the amount of Ten Thousand and 00/100 Dollars ($10,000.00), which $10,000.00 amount shall be fully earned by Optionor upon delivery thereof and shall be non-refundable to Optionee except upon the occurrence of an "Optionor Default" (as such term is hereinafter defined) or in accordance with Section 8 below, and (ii) the remaining One Hundred Ninety Thousand and 00/100 Dollars ($190,000.00) of the Option Payment shall be due and payable by Optionee to Optionor within one (1) business day after the occurrence of the last to occur of the following events (collectively, the "Payment Conditions"): (aa) Optionee receiving, from the Utah Division Of Water Quality, a groundwater discharge permit by rule, and (bb) Optionee receiving an exploratory permit from the Utah Division Of Oil Gas And Mining ("DOGM"). In the event that all of the Payment Conditions do not occur within sixty (60) calendar days of the date hereof, then either party shall be entitled to immediately cancel and terminate this Agreement by providing written notice to the other party.

Option Payment Earned Upon Delivery. Optionee acknowledges and agrees that the Option Payment constitutes consideration to Optionor for Optionor's agreement to (i) enter into this Agreement with Optionee, (ii) not sell the Property or the Assets, or transfer the Permits, to another purchaser during the Option Term; Optionor shall, however, be entitled to seek and enter into one or more back-up offers and to enter into a Refinery Property Transaction, and (iii) sell the Property and the Assets, and transfer the Permits, insofar as such Permits are transferable, to Optionee on the mutually agreed upon terms and conditions and for the Purchase Price set forth in the Purchase and Sale Agreement (as defined below), provided that Optionee has fully and timely exercised the Option in the manner provided in Section 7 below, and further provided that Optionor and Optionee enter into a mutually agreed upon Purchase and Sale Agreement, containing all of the material terms and conditions set forth in Exhibit B attached hereto. The Option Payment shall be fully earned by Optionor upon delivery thereof and shall be non-refundable to Optionee except upon the occurrence of an Optionor Default or in accordance with Section 8 below. As used herein the term "Optionor Default" shall mean Optionor selling the Property and the Assets, and transferring the Permits, to another purchaser during the Option Term. As more particularly set forth herein, Optionor entering into one or more back-up offers and/or a Refinery Property Transaction shall expressly NOT constitute an Optionor Default.

4. Extension Options. Provided that Optionee is not then in material default under this Agreement, Optionee shall have the right to extend the Option Term for two (2) successive periods of ninety (90) days each (each an "Extension" or, collectively, the "Extensions") by providing written notice to Optionor of Optionee's intention to extend the term of the Option, and paying to Optionor: (A) One Hundred Thousand Dollars ($100,000) with respect to the first Extension, and (B) an additional Two Hundred Thousand Dollars ($200,000) with respect to the second Extension (collectively, the "Extension Payments" or, individually, an "Extension Payment") on or before the date that is thirty (30) days prior to the then current Option Termination Date. Each Extension Payment, when made, shall be fully earned by Optionor upon delivery thereof, and shall be non refundable to Optionee, except in the event of the occurrence of an Optionor Default or in accordance with Section 8 below. Provided that Optionee timely exercises the applicable Extension, and timely and fully pays the associated Extension Payment, Optionee's exercise of such Extension shall expressly NOT constitute an Optionee Default.

5. Access to the Property. During the Option Term, Optionor shall provide to Optionee complete access to all facilities, books and records relating to the Property, and any and all equipment located on the Property, the Assets, and the Permits; and provide to Optionee copies of such books and records and shall cause the managers, directors, employees, attorneys, accountants and other agents and representatives (collectively, "Representatives") of Optionor to fully cooperate with Optionee and Optionee's Representatives in connection with Optionee's due diligence investigation of Optionor and the Property (collectively, "Due Diligence"). Optionee will not have any obligation to continue with its Due Diligence investigation or to exercise the Option if, at any time during the Option Term, the results of Optionee's Due Diligence investigation are not satisfactory for any reason in Optionee's sole discretion or for no reason. All disturbance and damage to the Property or the Assets caused as a consequence of Optionee's Due Diligence investigation and related activities (including, but in no event limited to, all disturbance and damage to the Property or the Assets caused in connection with the performance of the "Geological Surveys" described below) shall be promptly, reclaimed, restored, and repaired by Optionee at Optionee's sole cost and expense, as may be required by DOGM.

6. Geological Surveys; Title Matters.

Geological Surveys. As part of its Due Diligence investigation, Optionee may, at Optionee's sole cost and expense, conduct extensive geological, seismic or other surveys of the Property (the "Geological Surveys") to establish with greater accuracy the reserves on the Property and other characteristics of the tar sands deposits. Optionor acknowledges and agrees that Optionee may conduct the Geological Surveys; provided, however, in the event that Optionee determines for any reason not to exercise the Option or close the purchase and sale transaction described herein, then Optionee shall provide to Optionor copies of all reports produced or generated by or in connection with the Geological Surveys. All Geological Surveys and other activities performed by Optionee during the Option Term shall be performed and conducted in accordance with the terms and conditions set forth herein and all applicable federal, state, and local laws, rules, and regulations (collectively, "Applicable Law").

Title Matters. As part of its Due Diligence investigation, Optionee may, at its sole cost and expense, obtain a title commitment for title insurance or an Attorney's Title Opinion ("Title Documentation") from either a reputable title insurance company licensed to do business in the State of Utah or an attorney chosen by Optionee ("Title Insurer"), and shall deliver a copy of the Title Documentation to Optionor and Optionee at least three (3) months prior to the end of the Option Term ("Title Period"); the parties agree that the Title Period shall automatically expire at the end of the Option Term.

		i.	In the event the Title Insurer shall report to Optionee any defects in title, other than the Permitted Exceptions (as defined below) ("Title Objections"), Optionee shall notify Optionor of such Title Objections ("Objection Notice") prior to the expiration of the Title Period. Any title exceptions or conditions not included in the Objection Notice, as provided herein, shall be deemed to be Permitted Exceptions. The term "Permitted Exceptions" shall mean (i) easements, rights of way, encumbrances, conditions, covenants, restrictions, reservations and other matters of record, other than monetary liens, encumbrances, judgments and other exceptions which are in liquidated amounts and which are caused/ created by Optionor or its predecessors-in interest, and may be remedied by the payment of an ascertainable sum, (ii) applicable building and zoning ordinances, laws, regulations and restrictions by governmental authorities, and (iii) all title matters either accepted or waived by Optionee pursuant to the operation of Section 6.b.ii. below.

		ii	If Optionee notifies Optionor pursuant to Section 6.b.i. of any Title Objections, Optionor shall elect whether or not to cure the Title Objections and shall deliver written notice of such election to Optionee within ten (10) days after receipt of the Objection Notice. In the event Optionor does not timely respond to the Objection Notice as provided above, Optionor shall be deemed to have elected not to cure the Title Objections. If Optionor does not elect to cure the Title Objections within such time, Optionee shall have the right, as its sole and exclusive remedy, to either (i) accept title to the Property subject to the Title Objections without abatement of the Purchase Price in which case such Title Objections shall be deemed Permitted Exceptions or (ii) not exercise the Option. If Optionor elects to cure the Title Objections, then Optionor's obligation to cure the Title Objections shall be included as a condition to Closing under the Purchase and Sale Agreement and shall be governed by the terms thereof. If the Option is exercised, the terms of this paragraph shall survive the expiration of this Agreement.

7. Exercise of Option. At any time during the Option Term, as such Option Term may be extended in connection with one or both of the Extensions described in Section 4 hereof, if Optionee is not then in material default under this Agreement, Optionee may exercise the Option by timely sending Optionor a written notice of Optionee's intention to exercise the Option ("Exercise Notice"). If Optionee elects to exercise the Option, Optionee shall use commercially reasonable efforts to send the Exercise Notice at least sixty (60) days prior to the end of the Option Term, but Optionee's failure to do so shall not be deemed a default by Optionee under this Agreement; notwithstanding the foregoing, Optionee's failure to either: (A) send the Exercise Notice to Optionor at least fifty (50) days prior to the end of the Option Term, or (B) exercise the applicable Extension and pay the applicable Extension Payment on or before the date that is thirty (30) days prior to the then current Option Termination Date, then Optionee shall be deemed to be in default under this Agreement. Within ten (10) business days of Optionor's receipt of the Option Notice, Optionor shall deliver to Optionee a draft of the Purchase and Sale Agreement, containing all of the material terms and conditions set forth in Exhibit B attached hereto; and such other terms, conditions, covenants, representations and warranties as are mutually acceptable to Optionor and Optionee (the "Purchase and Sale Agreement"); among other things, the Purchase and Sale Agreement shall provide that the purchase and sale transaction contemplated therein will close within thirty (30) days of the expiration of the Option Term. Optionee acknowledges and agrees that, in the Purchase and Sale Agreement, Optionor will expressly NOT be making any representations or warranties relating to the condition, repair, value, or fitness for a particular purpose of the Property, the Assets, or the Permits, the quantity or quality of the resources or reserves located on the Property, any royalty obligations associated with the Property, types or marketability of products that might be produced using the resources or reserves located at the Property, the potential for Optionee to be able to operate a successful business, or any similar representations or warranties. As a consequence, Optionee expressly acknowledges and agrees that, in the event Optionee acquires the Property, the Assets, and the Permits, insofar as such Permits are transferable, such acquisition shall be on an 'As-is,' 'Where-is,' 'With-all-faults' basis, with Optionee making its decision to purchase or not purchase solely based upon Optionee's Due Diligence investigations. Optionor and Optionee shall use their best efforts and collaborate in good faith to negotiate the full terms of the Purchase and Sale Agreement, which Purchase and Sale Agreement must be executed not later than the Option Termination Date, except that, in the event one or both of the Extensions become effective, the Option Termination Date shall be extended by the length of the applicable Extension(s). If Optionee does not timely exercise the Option in the manner described herein on or before the Option Termination Date, or in the event that the Purchase and Sale Agreement is not executed by both parties hereto by the Option Termination Date (except that the Option Termination Date may be extended by the length of any properly exercised Extension(s)), then Optionor shall have the right to terminate this Agreement and retain the Option Payment and any Extension Payment(s) which, as described herein, are deemed to be fully earned by Optionor upon delivery, and are non-refundable, except upon the occurrence of an Optionor Default or in accordance with Section 8 below. Thereafter, neither party shall have any further obligations hereunder except for those that expressly survive termination of this Agreement.

8. Damage or Destruction. If, prior to the exercise of the Option and through no fault of Optionee, a substantial part of the Property is destroyed by earthquake, accident or other casualty which renders extracting the tar sands resources located at the Property to be materially more difficult than as of the Effective Date, Optionee may cancel this Agreement by giving written notice to Optionor and shall be entitled to the return of the Option Payment and any Extension Payments then made. However, Optionee shall have no right to cancel this Agreement if, within ten (10) business days after Optionee gives written notice of cancellation to Optionor, the Property has been repaired or otherwise mitigated to the extent that extracting tar sands resources located on the Property is not materially more difficult than as of the Effective Date. By way of clarification, destruction or damage to the "Refinery Equipment" (as such term is hereinafter defined), other equipment, or other Assets located at the Property shall expressly NOT grant to Optionee either the right to cancel this Agreement or the entitlement to have returned to Optionee any of the Option Payment or any Extension Payments then made.

9. Optionor's Obligation to Maintain.

Maintenance of Property and Assets. During the Option Term, Optionor will maintain, repair and replace, as necessary, the Property and the Assets in their existing condition, reasonable wear and tear excepted.

Maintenance of Permits. During the Option Term, Optionor will maintain any and all permits and other operational authorizations, such as licenses or leases issued by any state or local agency, commission, board or authority, including but not limited to all surface leases, all mining rights, all surface use permits, any groundwater or other environmental permits existing as of the Effective Date, and as required for and/or connected in any way to the operation of the Property (the "Permits") in full effect and good standing. Optionee expressly acknowledges and agrees to the following matters with respect to the Permits:

		i.	That the Permits which Optionor currently possesses apply to specific mining plans, processes, and methods which prior owners of the Property and the Assets proposed to utilize in connection with such prior owners' plans to mine, refine, and process oil and tar sands at the Property. Since Optionee intends to utilize different processes and methods in connection with mining, refining, and processing oil and tar sands at the Property, it is expected: (A) that some or all of the Permits will be inapplicable to the specific operations contemplated by Optionee, and (B) that Optionee's Due Diligence investigations, operations, and other activities on or at the Property during the Option Term, as well as Optionee's long-term operations and activities after purchasing the Property and the Assets, is virtually certain to result in Optionee being required to secure replacement or additional permits (collectively, "Additional Permits"). Such Additional Permits shall be secured by Optionee at its sole cost and expense and in full compliance with Applicable Law. Optionor and Optionee also acknowledge and agree that, in the event a Refinery Property Transaction occurs: (a) Optionee will be responsible for obtaining, at Optionee's cost and expense, amendments to various of the Permits which become necessary as a consequence of the occurrence of the Refinery Property Transaction, and (b) Optionee will promptly and fully cooperate with any subdivision proceedings which are associated with, and become necessary as a consequence of, the occurrence of the Refinery Property Transaction.

		ii.	That the ultimate approval of direct or indirect transfers of the Permits is under the jurisdiction of DOGM and other federal, state, and local governmental or quasi-governmental agencies or entities. Consequently, Optionee shall be responsible for securing, with Optionor's full collaboration, from DOGM and any other applicable agencies and entities, approvals for the transfer of the Permits (as such Permits may be affected by the Refinery Property Transaction, in the event such Refinery Property Transaction occurs), with Optionor making no representations or warranties that any or all of such Permits are transferable. Optionee is also aware that, in the event Optionee chooses to purchase the Property, Assets, and Permits, insofar as such Permits are transferable, in a so-called 'asset purchase' transaction it is likely that some or all of the Permits will not be transferable to Optionee, and that Optionee will be required to secure new or replacement Permits.

10. Conduct of Business; Terms And Conditions Relating To Optionor's Rights With Respect To The Refinery And The Possible Sale Of The Refinery Property.

Conduct of Business. During the Option Term, Optionor shall conduct its business with respect to the Property and the Assets only in the ordinary course and consistent with past practices, and Optionor shall not, without Optionee's prior consent, (a) mortgage, pledge or subject to encumbrance any of its assets or properties, other than those encumbrances arising by operation of law in the ordinary and usual course of business and those encumbrances incurred to secure existing credit lines and loan agreements; (b) except in the ordinary course of business, modify or amend, or cancel, any existing contract, agreement or understanding involving the Property or the Assets; or (c) enter into any contract, lease, license, agreement or other commitment that is material to Optionor's business, the Property, the Assets or financial position. In connection with the foregoing, and as it has done in the past, Optionor shall continue to be entitled to sell unprocessed tar sands on a periodic basis, provided that the aggregate amount of unprocessed tar sands which may be sold by Optionor during the Option Term shall not exceed 20,000 tons.

Refinery Property. Optionor and Optionee acknowledge that a significant amount of refinery associated equipment is currently situated on the Property (collectively, the "Refinery Equipment"). As disclosed by Optionor to Optionee, Optionor has entered into a Purchase And Sale Agreement relating to a "Refinery Property Transaction" (as such term is hereinafter defined), pursuant to which a third party may purchase all or a portion of the following (collectively, the "Refinery Property"): the refinery, the associated Refinery Equipment, and the real property upon which the Refinery Equipment is currently situated, as well as adjacent real property that would be used in connection with Refinery operations (all of which real property is part of the Property described herein). Depending upon the results of its further due diligence, such third party may desire to purchase all or a portion of the Refinery Property (the "Refinery Property Transaction"). Notwithstanding that, pursuant to the terms and conditions of Section 3.b. of this Agreement, Optionor has agreed that it will not sell the Property or the Assets, or transfer the Permits, to another purchaser during the Option Term (or until Closing, if the Option is exercised), Optionor shall nevertheless be expressly entitled to pursue, and enter into, the Refinery Property Transaction during the Option Term or at any other time during which Optionor owns the Property with such Refinery Property Transaction expressly NOT constituting an Optionor Default hereunder. In the event Optionor engages in the Refinery Property Transaction, (i) the Refinery Property that is part of the Refinery Property Transaction shall not be considered to be part of the Assets hereunder, (ii) one-half (1/2) of the total consideration paid for the Refinery Property by such third party purchaser in connection with the Refinery Property Transaction, shall be deducted from the Purchase Price under the Purchase and Sale Agreement, (iii) the amounts actually paid by Optionee in connection with the Option Payment and the Extension Payments, if any, shall be credited towards the Purchase Price, and (iv) such Refinery Property Transaction shall expressly NOT constitute an Optionor Default hereunder.

11. License.

During the Option Term, Optionor shall grant to Optionee a revocable license (the "License"), which can only be revoked upon an Optionee Default or at the end of the Option Term (unless the Option is exercised), pursuant to which Optionee shall have, subject to obtaining the necessary Additional Permits and other approvals and otherwise acting in compliance with the standards and requirements of Applicable Law, and at the sole cost and expense of Optionor, the right to (i) place its oil, tar sands, or any other extraction equipment on the Property, (ii) mine or otherwise extract tar sands materials from the Property for processing using Optionee's equipment, and (iii) store produced oil and other solvents, solutions or liquids produced by or necessary for use in connection with Optionee's processes and equipment. Optionee shall maintain accurate records of the amount of tar sands material processed by Optionee and shall provide monthly records to Optionor. In addition to the Option Payment, Optionee shall pay to Optionor an amount equal to Two Dollars ($2.00) per ton of tar sands material processed by Optionee, with the applicable payments being made within ten (10) days after the last day of each calendar month during the Option Term; provided, however, that all of the tar sands which Optionee purchases and acquires from Optionor (x) must be solely used by Optionee in connection with Optionee's Due Diligence investigations and/or Optionee's normal business operations and (y) may only be sold to third parties after undergoing Optionee's proprietary extraction process, it being understood and agreed that Optionee shall not sell, convey or otherwise transfer the raw or unprocessed tar sands materials (without having undergone Optionee's proprietary process) to any third party. In the event Optionee exercises the Option and purchases the Property, the Assets, and the Permits, insofar as such Permits are transferable, Optionee shall not receive any credit of any kind against the Purchase Price for the amounts Optionee pays to purchase tar sands from Optionor. Optionee agrees that the License to access the Property shall terminate immediately upon termination of the Option Term and this Agreement for any reason other than the exercise of the Option contemplated herein, and Optionee shall be obligated to remove, within thirty (30) days of the termination of the Option Term or this Agreement for any reason, and at Optionee's sole cost and expense, all of its equipment, stored oil and other solvents, solutions or liquids, and to reclaim the Property to the satisfaction of DOGM or to turn over the reclamation bond required by DOGM and provided by Optionee, except that if the amount of the reclamation bond is insufficient to fully reclaim the Property, Optionee shall be solely responsible for paying all amounts necessary to fully reclaim the Property as required by DOGM.

Optionee shall remain fully responsible for the performance of all persons involved in or engaged for the purposes set forth in Section 11.a., and for their compliance with all of the terms and conditions of this Agreement, as well as for all of such persons' compliance with all Applicable Law, as if each of such persons were Optionee's own employees. Nothing contained in this Agreement shall create any contractual relationship between Optionor and any employee, subcontractor or supplier of Optionee.

Optionee shall at its own cost and expense, and during the Option Term, maintain and carry insurance in full force and effect which includes, but is not limited to: (i) commercial general liability insurance at coverage levels reasonably acceptable to Optionor but in no event less than $2,000,000 per occurrence, and (ii) workers' compensation insurance as required by Utah state law. The liability insurance obtained by Optionee under this Section shall: (A) be primary and non-contributing; (B) provide "occurrence" based coverage; and (C) not have a deductible or self-insured retention amount in excess of $5,000.00. All liability insurance policies shall: (I) name Optionor as an additional insured, and (II) provide that Optionor shall receive at least 30 days' written notice prior to cancellation of or change in coverage. Upon Optionor's request, Optionee shall promptly provide Optionor with certificates of insurance or other evidence reasonably satisfactory to Optionor of such insurance coverage. Optionee shall maintain all insurance required under this Agreement with companies duly authorized to issue insurance policies in the State of Utah and holding a Financial Strength Rating of "A" or better, and a Financial Size Category of "VIII" or larger, based on the most recent published ratings of the A.M. Best Company.

Optionee shall pay any and all incremental reclamation bond and other fees assessed by DOGM for any additional reclamation that may result from Optionee's Due Diligence or other activities on the Property. Optionee's Due Diligence and other activities will be performed on a mutually agreed portion of the Property and will not interfere with any other portion of the Property (including, but not limited to, the Refinery Property) or Assets in any way.

Optionee agrees to fully and timely pay all subcontractors and other persons and entities who or which perform work on or at the Property for or under Optionee or for or under any of Optionee's contractors, agents, or representatives, and further agrees not to permit any mechanics, materialmens, or other liens (collectively, "Liens") of any kind to be recorded against or with respect to the Property. In connection with the foregoing, Optionee shall be required to fully and finally resolve or bond any such Liens within thirty (30) days of such Liens being recorded, with appropriate documentation being recorded and filed evidencing the removal, cancellation and/or bonding of such Liens. Furthermore, Optionee agrees to indemnify, defend and hold Optionor harmless against any and all Liens, claims, damages, and liabilities, of any nature or kind, arising from or relating to Optionee's access to and use of the Property during the Option Term, except to the extent the foregoing results from the negligence or willful misconduct of Optionor or its agents, employees, licensees, or invitees. Such indemnification shall survive any termination of this Agreement for a period of two (2) years.

12. Default by Optionee. In addition to Optionor's rights in the event that Optionee does not exercise the Option in the manner described in Section 7 on or before the Option Termination Date, or if Optionee fails to timely and fully perform or breaches any of its obligations under this Option Agreement, and such failure or breach has not been cured by Optionee within ten (10) days of Optionee's receipt of written notice of such breach from Optionor (an "Optionee Default"), then Optionor may terminate this Option Agreement immediately upon written notice to Optionee, and retain the Option Payment and all Extension Payments paid by Optionee (which, as described herein, are deemed to be fully earned by Optionor upon delivery, and are non-refundable, except upon the occurrence of an Optionor Default or in accordance with Section 8 hereof), as fully agreed upon liquidated damages for an Optionee Default.

13. Default by Optionor. If Optionor commits an Optionor's Default, Optionee shall have the right to terminate this Option Agreement, obtain a refund of the Option Payment, and/or to seek such other relief Optionee may have hereunder, under Applicable Law, or in equity, including, without limitation, seeking injunctive relief to prevent a sale of the Property to a party other than Optionee and the filing of an action for specific performance.

14. Assignment of Option. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs or successors and permitted assigns. Without the prior written consent of Optionor, which may be withheld by Optionor for any reason, in Optionor's discretion, Optionee may not assign its interest under this Agreement; provided, however, Optionee shall have the right, without Optionor's consent (but shall provide notice to Optionor), to assign its interest in this Agreement to an entity which is owned or controlled by Optionee or its principals.

15. Confidentiality. Without the prior written consent of the other party or as otherwise expressly set forth herein, neither Optionee nor Optionor shall, and each shall direct its Representatives not to, directly or indirectly, make any public comment, statement or communication with respect to, or otherwise disclose or permit the disclosure of any of the terms, conditions or other aspects of the transactions contemplated by this Agreement. Each party understands and agrees that certain of the information that will be furnished in connection with the Due Diligence investigation and exercise of the Option contemplated by this Agreement is confidential and proprietary, and each party agrees that it will maintain the confidentiality of the other party's confidential and proprietary information and will not disclose it to others (except that each party may make disclosures to such party's attorneys, accountants, and other professionals; in addition, Optionee shall be entitled to disclose all information it is required to disclose - but not more than the information it is required to disclose - as a consequence of being a publicly traded company) or use such other party's confidential and proprietary information, except in connection with evaluating the transactions contemplated by this Agreement, or, in the case of Optionee in Optionee's discretion, in connection with obtaining financing for the exercise of the Option contemplated by this Agreement, without the written consent of the other party. Information that is generally known or becomes known in the industry or that has been rightfully disclosed to the recipient party by third parties who have the legal right to do so shall not be deemed to be confidential or proprietary information for purposes of this Agreement. In the event that any party is at any time requested or required (by oral questions, interrogatories, request for information or documents, subpoena or similar process) to disclose any confidential or proprietary information supplied to it in connection with the transactions contemplated by this Agreement, such party agrees to provide the other party prompt notice of such request so that an appropriate protective order may be sought and/or such other party may waive the first party's compliance with the terms of this paragraph. In the event that the purchase and sale transaction contemplated by this Agreement is not consummated, each party agrees to promptly return to the other all confidential materials (and all copies thereof) that have been furnished to it.

16. Notices. Unless specifically stated otherwise in this Agreement, all notices shall be in writing and delivered to Optionor, at 6440 S. Wasatch Boulevard, Suite 105 Salt Lake City, Utah 84121; and, if addressed to Optionee, at 2 Park Plaza, Suite 1200, Irvine, California 92614, by one or more of the following methods: (a) personal delivery, whereby delivery is deemed to have occurred at the time of delivery; (b) overnight delivery by a nationally recognized overnight courier company, whereby delivery is deemed to have occurred the business day following deposit with the courier; (c) registered or certified mail, postage prepaid, return receipt requested, whereby delivery is deemed to have occurred on the third business day following deposit with the United States Postal Service; or (d) electronic transmission (facsimile or electronic mail), if to Optionor at bandrewsen@kmclaw.com. and srasmussen@scalleyreading.net, and if to Optionee at matt@vivakor.com and trent@vivakor.com, provided that such transmission is completed no later than 5:00 pm on a business day and the original is also sent by personal delivery, overnight delivery or by mail in the manner previously described, whereby delivery is deemed to have occurred at the end of the business day on which the electronic transmission is complete.

17. Costs. Except as expressly agreed upon otherwise by the parties, Optionee and Optionor shall each be responsible for and bear all of its own costs and expenses incurred in connection with the transactions contemplated by this Agreement, and no party shall be responsible for any of such costs and expenses of the other party. Notwithstanding the foregoing, should either party hereto employ an attorney or attorneys to enforce any of the terms and conditions hereof, or to protect any right, title, or interest created or evidenced hereby, the non-prevailing party in any action pursued in courts of competent jurisdiction shall pay to the prevailing party all costs, damages, and expenses, including reasonable attorneys' and legal fees, expended or incurred by the prevailing party. The terms, provisions and obligations contained in this Section shall survive the expiration or earlier termination of this Agreement.

18. Governing Law; Jurisdiction and Venue. This Agreement will be governed by and construed in accordance with the substantive laws of the State of Utah applicable to contracts executed in and to be performed in the State of Utah without regard to conflict of law provisions of the State of Utah. In any dispute arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement: (a) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of either the state courts located in Salt Lake County, Utah or the United States District Court for the District of Utah, Central Division; (b) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid; and (c) each of the parties irrevocably waives the right to a trial by jury.

19. Recording. Absent the prior written consent of both of such parties, neither Optionor nor Optionee shall have the right to record this Agreement or any memorandum of this Agreement in the public records.

20. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document.

21. Time of Essence. Optionor and Optionee hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a material breach of and a non-curable (but waivable) default under this Agreement by the party so failing to perform.

22. Obligations Surviving the Termination of this Option Agreement. Optionor and Optionee agree tl1.at the duties, obligations, and responsibilities of the parties set forth in the following provisions of this Option Agreement shall survive the termination of this Option Agreement for the periods expressly provided therein: 3, 4, 5, 6, 11.a, 11.b, 11.c, 11.d, 11.e, 15, 17, 18, and 19.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of the Effective Date.

	Tar Sands Holdings II, LLC, a Utah
	limited liability company


	By /s/ Jason Lee
	Name: Jason Lee
	Title: Manager


	By /s/ Kevin Baugh
	Name: Kevin Baugh
	Title: Manager


	Vivakor, Inc. a Nevada corporation


	By /s/ Matthew Nicosia
	Name: Matthew Nicosia
	Title Chief Executive Officer

EXHIBIT A

DESCRIPTION OF THE PROPERTY

The Property is commonly known as Asphalt Ridge, Tar Sand Mine, located in Uintah County, Utah. This definition includes all appurtenances, rights and privileges pertaining to the Property.

Lands involved:

Township 4 South, Range 20 East S.L.M. Section 23: S½NE¼, N½SE¼

Section 24: S½NW¼, N½SW¼

Township 4 South, Range 21 East S.L.M.

Section 30: W½SE¼, SE%SE¼, less certain property described in a certain 'Debtor's Deed,' dated May 3, 2013, a copy of which Debtor's Deed has been provided to Buyer.

Section 31: W½NE¼, SE¼ NE¼ Section 31: NE¼NE¼

Section 32: SW¼ (surface only)

EXHIBIT B

MATERIAL TERMS OF THE PURCHASE AGREEMENT

This Exhibit B to a certain Option Agreement between "Seller" and "Buyer" (as such terms are defined below), sets forth the material terms relating to a proposed sale and purchase transaction (the "Proposed Transaction") whereby Seller will sell, and Buyer will buy, either: (i), certain "Property," "Permits," and "Assets" (as such terms are defined below) currently owned by Seller, or (ii) all of the membership interests in Seller. Although this Exhibit B does not, and is not intended to, contractually bind Seller and Buyer to execute and deliver the Purchase and Sale Agreement (as defined below), it, however, contains the material terms which Seller and Buyer have mutually agreed to incorporate into a binding purchase and sale agreement (the "Purchase and Sale Agreement"). Unless otherwise defined herein, all defined terms used in this Exhibit B shall have the same meanings as set forth in the Option Agreement.

Seller:	Tar Sands Holdings II, LLC, a Utah limited liability company
Buyer:	Vivakor, Inc., a Nevada corporation
Property:	Asphalt Ridge, Tar Sand Mine, Uintah County, Utah (the "Property"); and any and all permits (the "Permits") and other operational authorizations and all equipment currently located on the Property (the "Assets"). As set forth in the Option Agreement, in the event Optionor engages in a "Refinery Property Transaction" (as such term is defined in the Option Agreement), then the associated "Refinery Property" (as such term is also defined in the Option Agreement), shall not be considered to be part of the Property.
Assumed Liabilities:	Any lease and/or royalty interest(s) to which the Property is subject as of the closing (the "Closing") of the Proposed Transaction.
Purchase Price; Credits Arising In The Event Of A Sale Of The Refinery Property:	$17,500,000.00, plus either: (i) all of the funds associated with reclamation bonds previously posted with DOGM by Seller being released to Seller, or (ii) Buyer keeping such reclamation bonds in place and reimbursing Seller, in full and by wire transfer, for all of such amounts at the Closing, and (y) less a credit towards the Purchase Price in an amount equal to one-half (1/2) of the total consideration paid by any third party for any Refinery Property in connection with a Refinery Property Transaction, if any. Additionally, in the event any Refinery Property Transaction occurs, the amounts actually paid by Buyer in connection with the Option Payment and the Extension Payments, if any, shall credited towards the Purchase Price. The Purchase Price shall be paid as follows: (a) the amount of $ by wire transfer at Closing, and (b) the amount of $ , plus interest at the rate of _%, in equal monthly payments of $ over a period of months.

Payment Method:

By wire transfer to an account designated by Seller.

Closing Date:

Thirty (30) days after the end of the Option Term, as may be extended (or the mutual execution of the Purchase and Sale Agreement, whichever is earlier)

Closing Deliverables

1. Bill of Sale;

2. Assignment and Assumption Agreement for any Unexpired Leases pertaining to the Property;

3. Assignment and Assumption of Executory Contracts pertaining to the Property;

4. Assignment and Assumption Agreement for any Permits pertaining to the Property that are transferable.

Representations and Warranties of Seller:

Mutually agreed upon representations and warranties for the sale of the assets and equipment, including representations and warranties regarding:

a) Title to the Property and Assets, except that, in the event Seller has engaged in a Refinery Property Transaction, the Refinery Property shall not be transferred to Buyer;

b) Undisclosed Liabilities;

c) Assigned Contracts;

d) Absence of certain Changes, events and Conditions;

e) Material Contracts;

f) Compliance with law to the best of Seller's knowledge;

g Permits;

h) Legal Proceedings, Governmental Orders;

i) Taxes; and

j) Other mutually agreed upon representations and warranties.

It is understood that all of the Assets relating to this transaction will be sold by Seller, and purchased by Buyer, in their 'As-is,' 'Where-is,' 'With-all-faults' condition. As more particularly set forth in Section 7 of the Option Agreement, Seller will be making no representations or warranties relating to the condition, repair, value, fitness for a particular purpose, the quantity or quality of the equipment, resources, or reserves located on the Property, royalty obligations associated with the Property, types or marketability of products that might be produced using the equipment, resources, or reserves located at the Property, the potential for Optionee to be able to operate a successful business, or any similar representations or

Representations and Warranties of Buyer:

Mutually agreed upon representations and warranties for the purchase of the Property, the Permits, and the Assets.

Closing Conditions:

a) Completion of Buyer's full Due Diligence investigation to Buyer's complete satisfaction in Buyer's sole discretion;

b) receipt of all necessary consents and approvals of governmental bodies and regulatory authorities to the extent required by Buyer, including the Additional Permits;

c) receipt of all necessary consents and approval of Buyer's lenders (to the extent applicable);

d) receipt of all approvals, clearances and consents by third parties necessary or desirable for the consummation of the Proposed Transaction contemplated hereby, including, without limitation, all third-party consents required to assign or transfer any and all contracts and Assets of Seller to be assumed or purchased by Buyer;

e) release of all security interests, if any, encumbering the Assets;

f) absence of any material adverse change in the Property or the Assets, reasonable wear and tear excepted;

g) absence of pending or threatened litigation regarding the Property, the Assets, Seller or any of Seller's members, except as expressly disclosed by Seller to Buyer;

h) Title to the Property and Assets free and clear of any liens and encumbrances other than Permitted Exceptions;

i) All of Seller's members shall have approved the Proposed Transaction and executed appropriate documentation;

j) Customary covenants regarding Confidentiality; Governmental approvals and consents, and books and records;

k) Buyer's payment of the applicable portion of the Purchase Price which is due at Closing;

l) Buyer and Seller executing delivering all applicable Closing documents; and

m) Other mutually agreed upon Closing Conditions.

Indemnifications:

Customary Indemnifications, including: Indemnification by Seller for any inaccuracy in or breach of any of the representations or warranties of Seller; any breach or non fulfillment of any covenant, agreement or obligation to be performed by Seller; any third party claim based upon, resulting from or arising out of the business, operations, properties, assets or obligations of Seller or any of its affiliates conducted, existing or arising on or prior to the Closing Date.

Indemnification by Buyer for any inaccuracy in or breach of any of the representations or warranties of Buyer; any breach or non fulfillment of any covenant, agreement or

obligation to be performed by Buyer.

Governing Law:

State of Utah.

Exhibit 10. 13

FIRST AMENDMENT TO OPTION AGREEMENT

THIS FIRST AMENDMENT TO OPTION AGREEMENT (“First Amendment”) is entered into effective as of the 3rd day of September, 2019 (“First Amendment Effective Date”), by and between Tar Sands Holdings II, LLC, a Utah limited liability company (“Tar Sands”) and Vivakor, Inc., a Nevada corporation (“Vivakor”). Tar Sands and Vivakor may be referred to herein individually as a “Party” and collectively as “Parties”.

RECITALS

A. Tar Sands and Vivakor entered into that certain Option Agreement dated July 9, 2019 (the “Option Agreement”), by which Tar Sands granted Vivakor an Option to purchase the Property, the Permits, and the Assets, as those terms are defined in the Option Agreement, subject to the terms and conditions contained in the Option Agreement.

B. The Parties now desire to amend the Option Agreement as provided for herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Recitals; Defined Terms. The Recitals above are hereby incorporated herein by reference. Any capitalized term used but not otherwise defined herein shall have the meaning given to such term in the Option Agreement.

2. Refinery Property. The Option Agreement is hereby amended such that the following sentence shall be inserted directly after the second sentence of Section 10.b. of the Option Agreement:

The Refinery Property is depicted on Exhibit C, attached hereto and incorporated herein by this reference.

3. Exhibit C. The Parties agree that the attached Exhibit C to this First Amendment, is hereby added and incorporated into the Option Agreement.

4. Full Force; Conflict. Except as amended and revised by this First Amendment, all terms and conditions in the Option Agreement remain unchanged and in full force and effect. In the event of any conflict between the terms of this First Amendment and the Option Agreement, this First Amendment shall control.

5. Counterparts. This First Amendment may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same agreement. A copy of this First Amendment executed by the Parties, whether in electronic or paper form and whether transmitted by email, fax, mail, or otherwise, shall have the same effect as an original.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the First Amendment Effective Date hereof.

Tar Sands:

Tar Sands Holdings II, LLC,

a Utah limited liability company

By: /s/ Jason Lee

Name: Jason Lee

Title: Manager

By: /s/ Kevin Baugh

Name: Kevin Baugh

Title: Manager

Vivakor:

Vivakor, Inc.,

a Nevada corporation

By: /s/Matthew Nicosia

Name: Matthew Nicosia

Title: Chief Executive Officer

EXHIBIT C

REFINERY PROPERTY

See attached.

Exhibit 10.14

SECOND AMENDMENT TO OPTION AGREEMENT

THIS SECOND AMENDMENT TO OPTION AGREEMENT (this “Second Amendment”) is entered into effective as of the 7/1/20202 day of June, 2020 (the “Second Amendment Effective Date”), by and between Tar Sands Holdings II, LLC, a Utah limited liability company (“Tar Sands”) and Vivakor, Inc., a Nevada corporation (“Vivakor”). Tar Sands and Vivakor may be referred to herein individually as a “Party” and collectively as “Parties”.

RECITALS

A. The Parties entered into that certain Option Agreement dated July 9, 2019 (the “Option Agreement”), by which Tar Sands granted Vivakor an Option to purchase the Property, the Permits, and the Assets, as those terms are defined in the Option Agreement, subject to the terms and conditions contained in the Option Agreement.

B. The Parties entered into that certain First Amendment to Option Agreement dated September 3, 2019 (the “First Amendment”).

C. The Parties now desire to further amend the Option Agreement as provided for herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. Amendment to Section 4. Section 4 of the Option Agreement shall be amended by deleting Section 4 in its entirety and inserting the following in lieu thereof:

3. Extension Notice. The Parties agree that this Section 3 of this Second Amendment shall serve as Optionee’s written notice to Optionor that Optionee intends to extend the term of the Option for two (2) successive periods of ninety (90) days each and, pursuant to the amendment to the Option Agreement provided in Section 2 of this Second Amendment, Optionor will not be required to pay a fee to extend the Option.

4. Full Force; Conflict. Except as amended and revised by this Second Amendment and the First Amendment, all terms and conditions in the Option Agreement remain unchanged and in full force and effect. In the event of any conflict between the terms of this Second Amendment and the Option Agreement, this Second Amendment shall control.

5. Counterparts. This Second Amendment may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same agreement. A copy of this Second Amendment executed by the Parties, whether in electronic or paper form and whether transmitted by email, fax, mail, or otherwise, shall have the same effect as an original.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this Second Amendment as of the Second Amendment Effective Date hereof.

Tar Sands:

Tar Sands Holdings II, LLC,

a Utah limited liability company

By: /s/ Kevin Baugh

Name: Kevin Baugh

Title: Manager

Vivakor:

Vivakor, Inc.,

a Nevada corporation

By: /s/ Matthew Nicosia

Name: Matthew Nicosia

Title: Chief Executive Officer

Exhibit 10.15

INTELLECTUAL PROPERTY LICENSE AGREEMENT

This Intellectual Property Agreement (the “Agreement”) is hereby entered into effective as of May 15th, 2020 (the “Effective Date”), by and between, VivaVentures Precious Metals, LLC, a Nevada limited liability company (“VivaVentures”) and Vivakor, Inc., a Nevada corporation (“Vivakor” and together with VivaVentures, the “Licensees”) on the one hand, and of Bill Ison (“Ison”) and Vaporetek Holdings, LLC an unincorporated entity (“Vaporetek” and together with Ison, the “Licensor”). The Licensees and the Licensor may each be referred to herein as a “Party” and together as the “Parties.”

I. RECITALS

A. WHEREAS, Licensor is the owner of certain intellectual property related to a vapor extraction technology suitable to extract gold and other precious metals from sands and other sand-based ore bodies, as described in Exhibit A, hereto (the “Extraction Technology”), which Licensees are interested in licensing from Licensor for the purpose of developing commercially-viable applications using the intellectual property;

B. WHEREAS, the Parties are parties that certain Contribution Agreement dated March 14th, 2014, under which the Parties formed VivaVentures Precious Metals, LLC for the purpose of building machines capable of extracting gold and other precious metals from sands and other sand-based ore bodies based on the Extraction Technology (the “Contribution Agreement”);.

C. WHEREAS, one of the Licensor’s obligations under the Contribution Agreement is to grant an exclusive license to the Licensees for the purpose of allowing both Licensees the right to use the Extraction Technology to develop and build machines using the Extraction Technology, and run a business based on operating said machines, once built;

D. The Parties desire that Licensor grant an exclusive license for applications and implementations involving the Extraction Technology as set forth herein.

NOW, THEREFORE, in consideration of the promises and agreements set forth below and the other considerations cited herein, the Parties agree as follows.

II. DEFINITIONS

As used in this Agreement, the following terms shall be defined as set forth below:

2.1 “Confidential Information” shall mean any and all information disclosed by a Party (the “Disclosing Party”) to the other party (the “Recipient”) hereunder that is clearly marked or identified as “confidential,” such as proprietary information relating to the Disclosing Party’s technology (including the Intellectual Property and any associated knowhow), products, processes, business information, or intellectual property rights. “Confidential Information” further includes the terms and conditions of this Agreement not otherwise made public by agreement of the parties as well as information arising or disclosed pursuant to this Agreement. Notwithstanding the foregoing, information will not be considered “Confidential Information” to the extent the Recipient can demonstrate by written record or other suitable physical evidence that:

such specific information was lawfully in the Recipient’s possession or control prior to the time such information was disclosed to the Recipient by the Disclosing Party;

such specific information was independently developed by one or more employees or other agents of the Recipient without reference to such Confidential Information;

such specific information was lawfully obtained by the Recipient from a third party under no obligation of confidentiality to the Disclosing Party; or

such specific information was, at the time it was disclosed or obtained by the Recipient, or thereafter became, publicly known otherwise than through a breach of the Recipient’s obligations hereunder.

2.2 “Improvements” shall mean inventions or other improvements which relate to or are based on the Inventions and which are within the scope of the then existing Intellectual Property. An Improvement shall be within the scope of a patent in the Intellectual Property if covered by a claim, either literally or under the doctrine of equivalents.

2.3 “Intellectual Property” shall mean:

all issued patents, continuations, continuations-in-part, divisionals, and other patents or applications derived from the Extraction Technology;

all related knowhow and trade secrets relating to the Extraction Technology; and

all other trade secrets and intellectual property information related to the Extraction Technology.

2.4 “Licensed Products” shall mean any product, device, process, method, apparatus, kit or component part, or any part thereof, or any subject matter, where manufacture, use, or sale is covered, in whole or in part, either literally or under the doctrine of equivalents, by any issued or pending claim of one ore more of the Intellectual Property pending or issued in the country of manufacture, use, or sale.

2.5 "New Invention(s)" shall mean an invention conceived or reduced to practice by Licensees or jointly by Licensees and Licensor which relates to or is based on the subject matter of the Intellectual Property or on work developed under the direction of Licensor, but which is outside the scope of the then-existing Intellectual Property.

2.6 “Party” (and collectively, “Parties”) shall mean either or collectively the Licensor and/or Licensees, and all associated affiliates. Affiliates shall include a) any officer, director, and/or legal entity directly or indirectly controlled by, or controlling, a Party, b) an entity of which fifty percent or more of the voting stock is controlled or owned directly by a Party; c) an entity which owns fifty percent or more of the voting stock of a Party; and e) an entity the majority ownership of which is directly or indirectly common to the majority ownership of a Party.

2.7 “Sublicensee” shall mean third parties to whom the Licensees sublicenses the Intellectual Property pursuant to the terms of this Agreement to develop, manufacture, have manufactured, use, and sell the Licensed Products.

2.8 “Sublicensee Income” shall mean compensation or consideration of any kind received by Licensees from a Sublicensee, including without limitation cash, marketable securities, stock or shares, and any tangible or intangible assets.

III. grant of license

3.1 Grant. Subject to the terms and conditions of this Agreement, Licensor grants and the Licensees hereby accept a worldwide, exclusive, non-transferable license in the Intellectual Property to develop, manufacture, have manufactured, use, market, import, have imported, offer for sale, and sell the Licensed Products. This license grant shall be for the lifetime of the Intellectual Property.

3.2 Sublicense. The Licensees shall have the right to sublicense the Intellectual Property to third parties (hereinafter “Sublicensee”), subject to the prior written consent of Licensor, whose consent shall not be unreasonably withheld. The sublicense terms shall be commercially reasonable when compared to similar transactions conducted at arms length, and no sublicense shall contain the right to grant further sublicenses without the prior written consent of Licensor.

3.3 Retention of Rights. Licensor shall retain the nontransferable right to make, use and practice the Intellectual Property for his own noncommercial purposes. The license granted hereunder shall not be construed to confer any rights upon Licensees by implication, estoppel or otherwise as to any technology or intellectual property other than the Intellectual Property.

3.4 Third Party Licenses. The parties recognize that Licensees may encounter patents held by third parties, and that licenses between Licensor or Licensees and such third parties may be necessary in order to enable the Licensees to develop, make or market certain Licensed Products. In that event, the Licensees have the right to enter into licensing agreements with such third parties, provided Licensor is consulted before hand, is reasonably satisfied that the third party does in fact hold a patent that limits Licensees’ rights in respect of the making, using and/or marketing the Licensed Products, and Licensor gives its written approval to such license, which approval shall not be unreasonably withheld. Any money received by Licensees in exchange for such cross-licensing shall be treated as consideration from Sublicensees for sublicensing.

IV. payments FOR THE LICENSE

4.1 Payments. All payments due to the Licensor for the License to the Intellectual Property are set forth in the Contribution Agreement and the VivaVentures Operating Agreement, which all the Parties hereto are also parties.

V. Reports and Records

5.1 Record Retention. Licensees shall make and retain and shall cause its Sublicensees to make and retain, for a period of three (3) years following the period of each report required by the Article true and accurate records of the account containing all the data reasonably required for the full computation and verification of gross sales, gross revenues, and other information for use by VivaVentures to calculate any amounts due and owing to the Parties. Such records shall be in accordance with generally accepted accounting principles consistently applied and shall be kept at Licensees’ principal place of business. The Licensees and any of their Sublicensees shall permit the inspection of such records by an independent certified public accountant chosen by Licensor and reasonably acceptable to Licensees during regular business hours upon five (5) business days’ written notice to Licensees, to the extent necessary to verify compliance with this Agreement. Such inspection shall not be made more than once each calendar year unless an error is discovered, or for other good cause. All costs of such inspection and copying shall be paid by Licensor, provided that if any such inspection shall reveal that an error has been made in an amount equal to 5% or more of any such payment due, such costs shall be paid by Licensees.

VI. Due Diligence in ComMercialization

6.1 Reasonable Efforts. Licensees agree that they shall use its reasonable efforts and diligently endeavor to achieve the development, regulatory approval, and commercialization of the Licensed Products. Licensees may conduct such efforts itself or through a Sublicensee.

6.2 Termination. If, after a period of ten years from the Effective Date, the Licensees have not commercialized a Licensed Product, Licensor shall have the right, at its option to: (a) terminate the Agreement; or, (b) convert any or all of the rights granted to Licensees from exclusive to non-exclusive.

6.3 Status Reports. Licensees shall provide periodic Status Reports to Licensor, at least quarterly, indicating progress and problems to date in commercialization of the Licensed Products. Such Status Reports shall also include a forecast and schedule of major events required to marked the Licensed Products. Licensor shall treat all such information as confidential.

VII. Patent Prosecution

7.1 Patent Prosecution Expenses. Beginning from the Effective Date and during the term of this Agreement and subject to Section 0, Licensor shall diligently prosecute and maintain, at the Licensees’ expense, any United States and foreign patents comprising the Intellectual Property, using patent counsel of the Licensees’ choice that is reasonably acceptable to Licensees.

7.2 Patent Prosecution Cooperation. The Parties agree to fully cooperate with one another and to keep each other fully informed regarding the preparation, filing, and prosecution of all patent applications which Licensor may file and prosecute pursuant to this Agreement. Licensees will also execute and deliver all documents which Licensor may deem necessary or desirable for the Intellectual Property. Licensor will also promptly provide copies of all documents received from any patent office, so as to keep Licensees informed of the continuing prosecution. The Parties agree that representatives of each Party shall meet periodically to review and keep one another fully informed as to the status of all Intellectual Property and all patent-related matters. Such representatives may meet in person or telephonically, as mutually agreed upon by the Parties.

7.3 Protection of Licensed Products. Licensor will use reasonable efforts to amend any patent application to include claims reasonably requested by the Licensees to protect the Licensed Products.

7.4 Foreign Protection of Licensed Products. The Licensees will have the right to request that Licensor obtain or maintain patent protection on the Intellectual Property in foreign countries if possible or available. Licensees shall notify Licensor in writing of the countries in which it desires to obtain or maintain foreign patents not less than sixty (60) days prior to the deadline for any payment, filing, or action to be taken in connection therewith, and Licensees shall be responsible for all associated costs. Upon receipt of such request, Licensor will undertake the actions described in Section VII with respect to each foreign country requested by Licensees and shall timely file any applicable patent applications. Licensees will be responsible for all costs associated with such a request.

7.5 Patent Marking. The Licensees and their Sublicensees shall mark all Licensed Products sold by it with appropriate patent markings indicating that the Licensed Products are protected by one or more of patents in the Intellectual Property, if applicable. All Licensed Products shipped to or sold in other countries shall be marked in such a manner as to conform to the patent laws and practices of the country of manufacture or sale.

7.6 Decision Not To file. If Licensor decides to take steps which would result in either not filing a patent application or the abandonment of a patent or patent application, it shall promptly give notice to Licensees of such decision, which notice shall in no event be less than thirty (30) days prior to the next deadline for payment, filing, or any other related action. Further, Licensor shall provide Licensees an opportunity to assume responsibility for such patent application or patent.

7.7 Decision Not To pay. At any time, upon providing sixty (60) days written notice, Licensees may discontinue making payments with regard to any patent application(s) and/or patent(s) within the Intellectual Property, and in such case, Licensees shall have no further rights under this Agreement and this license shall terminate with respect to those patent applications and/or patents.

7.8 Patent Extension. With respect to any issued patent in the Intellectual Property, Licensor will designate Licensees as its agent for obtaining an extension of such patent or governmental equivalent which extends the exclusivity of any of the patent subject matter where available in any country in the world, or if not feasible, at Licensees’ option, permit Licensees to file in Licensor’s name or diligently obtain such extension for the Licensees, or their Sublicensees at Licensees’ expense. Licensor agrees to provide reasonable assistance, at no out-of-pocket expense, to facilitate Licensees’ efforts to obtain any extension. If for any reason the Licensees fail to exercise diligent efforts to obtain any extension or determine that it will not seek such extension, the Licensees shall provide reasonable assistance, at no out-of-pocket expense, to facilitate Licensor’s efforts to obtain any such extension.

VIII. Infringement

8.1 Notice of Infringement. The Parties shall promptly give written notice to each other of any apparent infringement discovered with respect to any patent issuing from the Intellectual Property. Such notice shall set forth the known facts of the apparent infringement in reasonable detail. Upon written notice to Licensor, the Licensees shall have the first right, but not the obligation, to bring any legal action with respect to such apparent infringement at its own expense and for its own benefit. In such event, Licensor agrees to cooperate with the Licensees and to join in such action as a party plaintiff if requested to do so by the Licensees and, at the Licensees’ request, to give the Licensees all needed information, assistance, and authority to file and prosecute such suit. The Licensees shall reimburse Licensor for all verified out-of-pocket expenses incurred by Licensor in providing such assistance, including attorneys’ fees, expenses, and expert witness fees incurred by Licensor. To ensure that no rights of Licensor are compromised in any such action, the Licensees shall not settle any such claim or action, or enter into any settlement agreement that admits that any third party product does not infringe the Intellectual Property or that any patent in the Intellectual Property is invalid or enforceable without Licensor’s prior written consent, which consent shall not be unreasonably withheld. If there is a recovery in such action (including a recovery as a result of a settlement), after recovery of all direct out-of-pocket expenses incurred by the Licensees and Licensor in connection with the action, the Licensees shall pay to Licensor an cash or cash equivalent received from any alleged infringer equivalent to the royalties which Licensor would have received if such alleged infringer had been a Sublicensee.

8.2 Infringement of Third Party Rights. If the Licensees or Licensor receive notice of a claim or action by a third party alleging infringement of such third party’s rights in connection with the development, manufacture, use, marketing, or sale of a Licensed Product by the Licensees or their Sublicensees, the Licensees shall have the right to conduct the legal defense, but shall not enter into any disposition with respect thereto, or enter into any settlement agreement that admits that any Licensed Product infringes any third party right without Licensor’s prior written consent to such disposition, which consent shall not be unreasonably withheld. All costs of the Licensees’ defense, and any damages awarded or amounts paid in settlement in any such claim shall be the sole responsibility of the Licensees. Licensor shall cooperate with the Licensees if requested by the Licensees in its defense of such infringement claim or action, provided that Licensees shall reimburse Licensor for all out-of-pocket expenses, including attorneys’ fees, expenses, and expert witness fees incurred by Licensor in providing such cooperation.

8.3 Indemnification. Subject to the notification provisions of Section 0 below, the Licensees shall defend and hold harmless Licensor against a third party infringement claim or action which results from the development, manufacture, use, marketing, or sale of a Licensed Product by the Licensees or their Sublicensees, and indemnify Licensor against the cost of such defense undertaken by the Licensees, including attorneys’ fees and all other legal expenses, costs, expert witness fees, and damages awarded or amounts paid in settlement in any such claim or action. Such indemnification shall include attorneys’ fees for independent counsel retained by Licensor if Licensor deems such separate independent counsel to be necessary as a result of conflicts of interest with the Licensees, but only in connection with services rendered in connection with matters with respect to which the parties have adverse interests. The Licensees’ indemnification shall not include indemnification to the extent to which such infringement is directly caused by Licensor prior to the date of this Agreement.

8.4 Notification. In the event that any claim is asserted against Licensor or the Licensees (or any of their respective officers, directors, trustees, employees, agents, or representatives), or if any such person is made a party defendant in any action involving a matter which is the subject of Licensor’s indemnification as set forth above, or if either Party becomes aware of a claim or patent which might provide the basis for a third party’s claim of infringement against Licensees for the development, manufacture, use, marketing, or sale of a Licensed Product, then such Party shall give written notice to the other within thirty (30) days of having learned of such, or within ten (10) days of the receipt of a written complaint or formal pleading regarding the same.

IX. Term and Termination of agreement

9.1 Term. The term of the license granted under this Agreement shall continue for the life of the Intellectual Property, unless terminated sooner under the provisions of this Agreement.

9.2 Termination by Licensor. In addition to any other rights of termination set forth in this Agreement, and subject to any applicable cure periods prescribed herein, Licensor may in his sole discretion terminate this Agreement in the event that:

The Licensees fail to make payments when due of any amounts owed to Licensor under this the Contribution Agreement and VivaVentures Operating Agreement and the Licensees does not correct such failure within thirty (30) business days after receipt of written notice of such failure is delivered to the Licensees;

The Licensees commit a breach of any other obligation of this Agreement or related Party agreement which is not cured (if capable of being cured) within thirty (30) days after receiving notice of such;

The Licensees or their Sublicensees intentionally provide any materially false report, in which event such termination shall be effective thirty (30) days after written notice to Licensees; or,

The Licensees become insolvent or a petition in bankruptcy is filed against the Licensees and is consented to, acquiesced, and remains undismissed for ninety (90) days; or Licensees makes a general assignment for the benefit of creditors, or a receiver is appointed for the Licensees, and the Licensees do not return to solvency before the expiration of said thirty (30) day period set by the notice, in which event such termination shall be effective thirty (30) days after written notice to the Licensees.

9.3 Conversion to Non-Exclusive License. In addition to the provision set forth in Section 9.2 above, Licensor shall have the option, at its sole discretion, to convert the license set forth in this Agreement to a non-exclusive license if the Licensees or their Sublicensees have not commercialized a Licensed Product after a period of ten years from the Effective Date.

9.4 Termination by Licensees. The Licensees shall have the option to terminate this Agreement upon providing sixty (60) days’ written notice to Licensor.

9.5 Obligations on Termination.

9.5.1 Rights Termination. Upon termination of this Agreement and except as otherwise expressly provided herein, all of the rights and licenses granted to Licensees under the terms of this Agreement shall terminate. The Licensees shall assign any sublicenses granted under this Agreement to Licensor. All rights licensed or transferred by Licensor to the Licensees hereunder which are subject to termination shall revert to Licensor, and the Licensees agree to execute all instruments reasonably necessary and desirable to revest said rights in Licensor.

9.5.2 Regulatory Records. Upon termination, the Licensees shall transfer ownership and possession of all records and documents of Licensees filed with regulatory authorities relating to the Licensed Products.

9.5.3 Return of Confidential Material. Upon termination, the Licensees and their Sublicensees shall return all Confidential Information, including any knowhow relating to the Intellectual Property, transferred to the Licensees by Licensor. The Licensees and their Sublicensees shall maintain confidentiality and not use any such information for a period of five (5) years after termination of this Agreement.

9.5.4 Unsold Inventory. In the event this Agreement is terminated for any reason, the Licensees and their Sublicensees shall have the right to sell or otherwise dispose of their stock of any Licensed Products, subject to the obligation of the Licensees to pay Licensor the payments as provided in Section IV of this Agreement. The Licensees shall immediately discontinue any additional production of the Licensed Products.

9.5.5 Sublicensees. In the event that the license granted to the Licensees under this Agreement is terminated, any sublicenses granted to Sublicensees shall remain in full force and effect, provided that the Sublicensee is not then in breach of its sublicense agreement, and the Sublicensee agrees to be bound to Licensor as a licensee under the terms and conditions of the agreement, in which case Licensor and Sublicensee shall enter into appropriate agreements or amendments to the sublicense agreements to substitute Licensor for the Licensees as the licensor.

9.5.6 Other Rights. Termination of this Agreement for any reason shall not release any Party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination, nor preclude either party from pursuing any rights and remedies it may have hereunder or at law or in equity which accrued or are based upon any event occurring prior to such termination, including, without limitation, Licensees' obligation to pay all royalties or other payments and/or reimbursements specified in Section IV. The rights provided in. this Section shall be in addition and without prejudice to any other rights which the parties may have with respect to any breach or violations of the provisions of this Agreement.

X. Indemnification and Warranties

10.1 Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR DISCLAIMS ALL WARRANTIES WHATSOEVER, WITH RESPECT TO THE Intellectual Property, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT CLAIMS (ISSUED OR PENDING), OR THAT THE MANUFACTURE, USE OR SALE OF THE LICENSED PRODUCT(S) AND USE OF THE INTELLECTUAL PROPERTY WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL. OR CONSEQUENTIAL LOSSES OR DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. LICENSEES TAKES THE Intellectual Property “AS-IS,” “WITH ALL FAULTS,” AND “WITH ALL DEFECTS” AND EXPRESSLY WAIVES ALL RIGHTS TO MAKE ANY CLAIM WHATSOEVER AGAINST LICENSOR FOR WARRANTY OF ANY KIND RELATING TO THE Intellectual Property SUBJECT TO THE REPRESENTATIONS MADE HEREIN. IN NO CASE SHALL LICENSOR’S LIABILITY FOR DAMAGES OF ANY TYPE EXCEED THE TOTAL ROYALTIES WHICH HAVE ACTUALLY BEEN PAID TO LICENSOR BY LICENSEES AS OF THE DATE OF FILING OF THE ACTION AGAINST LICENSOR WHICH RESULTS IN A SETTLEMENT OR AWARD OF DAMAGES.

10.2 Indemnity. With the exception of infringement claims or actions covered by Section VIII, Licensees shall defend, indemnify, and hold harmless Licensor from and against any and all liabilities, claims, suits, damages, and expenses of any nature related to a third party claim in connection with (i) the use by the Licensees or their Sublicensees of the Intellectual Property; (ii) the development, manufacture, use, marketing, sale, or other disposition of any Licensed Products by the Licensees or their Sublicensees, or any statement or breach of any representation or warranty made by the Licensees or their Sublicensees with respect thereto; or (iii) resulting from or arising out of the exercise by Licensees of this license or any sublicense granted by Licensees pursuant to this Agreement. In the event of such indemnification, Licensor shall reasonably cooperate with the Licensees in defending any such claims. Licensor shall be entitled to receive information regarding the status of any such matter, and shall be entitled to retain counsel on its own behalf at Licensees’ expense, in addition to counsel retained by Licensees to defend Licensor, if Licensor is named a party, and if Licensor deems such separate independent counsel to be necessary as a result of conflicts of interest with the Licensees, or if Licensor is not satisfied with the defense provided by the Licensees for any reason.

10.3 Insurance.

The Licensees, at their sole cost and expense, shall purchase and maintain in effect and shall require their Sublicensees to purchase and maintain in effect comprehensive or commercial form general liability insurance (contractual liability and products liability included on a world-wide basis) insuring its and their activities in connection with clinical trials, marketing approvals, and covering all claims with respect to any Licensed Products manufactured or sold within the term of any license granted hereunder, and professional liability (errors and omissions), and workers’ compensation as required by law and automobile liability, which policies shall, if required by the Licensor in writing: (i) be in such form of coverage and written by such company licensed to conduct business in the State of California as Licensor shall reasonably approve, (ii) provide that such policy is primary and not excess or contributory with regard to other insurance Licensor may have, and (iii) provide at least thirty (30) days’ notice to Licensor of cancellation. In the event the Licensees cannot obtain such insurance, or cannot obtain such insurance at a reasonable price, it shall obtain insurance in an amount to reasonable to cover the Licensees in the event of a covered event, based on the then-current operations of the company. Such insurance shall be written to cover claims incurred, discovered, manifested or made during or after expiration of this Agreement. The Licensees shall have this insurance in place prior to beginning development on a Licensed Product and at such time will furnish a certificate of such insurance to Licensor within thirty (30) days thereafter. The Licensees shall obtain such additional insurance coverage as shall be reasonably requested by Licensor, and reasonably agreed to by the parties, provided that Licensor shall not request changes in such coverage more frequently than annually.

The Licensees expressly waive any right of subrogation that it may have against Licensor resulting from any liabilities, claims, suits, damages, and expenses of any nature for which Licensees has agreed to indemnify Licensor or hold Licensor harmless under this Section.

10.4 Representations and Warranties of Licensor. Licensor represents, warrants, and covenants to the Licensees as follows:

Licensor warrants that Licensor has the rights, ownership, titles and interests, legal and equitable, necessary in the Intellectual Property to grant the Licensees the exclusive license and rights described herein.

The license granted to the Licensees under this Agreement is the only license granted by Licensor with respect to the Intellectual Property and during the term of this Agreement Licensor shall not grant any third party rights inconsistent with the rights granted Licensees herein.

There are no pending, and to the knowledge of Licensor as of the Effective Date, any threatened actions, claims, or proceedings in any way relating to the Intellectual Property.

10.5 Representations and Warranties of the Licensees. The Licensees represent, warrant, and covenant to Licensor as follows:

The Licensees are a corporation (Vivakor) and a limited liability company (VivaVentures Precious Metals), duly organized, validly existing and in good standing under the laws of the State of Nevada having full Corporate power to conduct each business as presently conducted, and to enter into and consummate the transactions contemplated by this Agreement.

The execution, delivery and performance under this Agreement by the Licensees has been duly authorized by all required corporate action, do not constitute a breach, default or violation of any of the provisions of Licensees' Articles of Incorporation, Bylaws or other charter documents, or any other agreement, law, or regulation to which it may be a party or by the terms of which it may be bound.

XI. OWNERSHIP OF IMPROVEMENTS AND nEW INVENTIONS

Improvements and New Inventions will be owned solely by the Licensees and shall be free and clear of any ownership or other rights claimed by Licensor and shall not be part of the Intellectual Property and/or Extraction Technology. Furthermore, the Licensees will have the sole right to file any patent, copyright, or other intellectual property rights applications or registrations resulting from any such Improvements or New Inventions anywhere in the world. Without limiting the generality of the foregoing, and in the alternative, the Licensor hereby irrevocably transfers and assigns to the Licensees, completely and exclusively, and by virtue of the execution of this Agreement and without any other additional compensation, all of the Licensor’s rights, title, and interest, including, but not limited to, all intellectual property rights, if any, in and to the Improvements and New Inventions. The Licensor acknowledges and agrees that, as a result of the foregoing provisions of this Section 11, all such Improvements and New Inventions hereby become the exclusive property of the Licensees, and, the Licensees will have the sole right to determine the treatment of any Improvements and New Inventions, including, without limitation, the rights to keep Improvements and New Inventions as trade secrets, to file and execute patent applications on Improvements and New Inventions, to use and disclose Improvements and New Inventions without prior patent application, to file registrations for any other intellectual property rights, and to transfer any intellectual property rights to any party the Licensees so choose, or to follow any other procedure that the Licensees deems appropriate. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement shall preclude Licensees from developing, manufacturing, marketing or distributing devices suitable to extract gold and other precious metals from sands and other sand-based ore bodies.

XII. Miscellaneous

12.1 Choice of Law. This Agreement will be governed by the laws of the State of California.

12.2 Compliance with Laws and Regulations. The Licensees shall use reasonable efforts to comply with all foreign and United States federal, state and local laws and regulations applicable to the testing, production, transportation, packaging, labeling, export, sale and use of the Licensed Products. In particular, Licensees shall be responsible for assuring compliance with all U.S. export laws and regulations applicable to this license and the Licensees’ activities hereunder. The Licensees shall be responsible for all taxes, duties, and other governmental charges, however, designated, which are now or hereafter imposed by any such authority (a) by reason of the performance by the Licensees of their obligations under this Agreement, or the payment of any amounts by the Licensees to Licensor under this Agreement, (b) based on the Intellectual Property or Licensed Products, or (c) relating to the import of the Licensed Products into any such territory. Licensor agrees to use reasonable efforts to cooperate with Licensees at Licensees’ expense, in connection with any filings required by any governmental entity.

12.3 Notices. Any notice, report, request or other communication required or permitted to be given under this Agreement by a Party to the other parties shall be either hand-delivered (including delivery by courier), or mailed by first-class registered or certified mail (airmail if internationally), with return receipt requested, and addressed as follows:

	To Licensees:	Vivakor, Inc.
		2 Park Plaza, Suite 800
		Irvine, CA 92614
		Tel: 949-281-2606
		Fax:

		VivaVentures Precious Metals, LLC
		3691 Misty Falls Ln.
		Las Vegas, Nevada, 89129
		702-326-0281


	With a copy to:	Law Offices of Craig V. Butler
		300 Spectrum Center Drive, Suite 300
		Irvine, CA 92618
		Attn. Craig V. Butler
		Fax: (949) 209-2545
		Email: cbutler@craigbutlerlaw.com

	To Licensor:	William Ison
		12622 S. Park Ave.
		Riverton, UT 84065
		Tel: 949-698-8520
		Fax:

	With a copy to:	_________________________
		_________________________
		_________________________
		_________________________

Each Party may designate in writing a new address to which any notice may thereafter be given. Any notice sent by registered or certified mail shall be deemed to have been given at the time of the receipt thereof by the other Party or three (3) calendar days after the time of mailing, whichever is earlier.

12.4 Entire Agreement. This Agreement contains the entire agreement with respect to the subject matter hereof and supersedes any and all prior agreements, written or oral with respect thereto.

12.5 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies. This Agreement shall not be modified or amended except pursuant to an instrument in writing executed and delivered on behalf of each Party to be bound. No delay on the part of any Party, in exercising any right hereunder shall operate as a waiver thereof. Neither any waiver on the part of any Party of any such right, nor any single or partial exercise of any such right shall preclude any further exercise thereof or the exercise of any other such right unless waived in writing. The rights and remedies hereunder provided are cumulative and except as otherwise provided herein are not exclusive of any rights or remedies that any party may otherwise have at law or in equity. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the fact that the act, omission, occurrence, or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement between the Parties) as to which there is no inaccuracy or breach.

12.6 Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. The parties may not assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party.

12.7 Severability. If any term or provision in this Agreement or the application thereof shall be held invalid, void or unenforceable, the remainder of such term or provision shall remain in full force and effect, and the invalid, void, or unenforceable term or provision shall be reformed to the extent possible in order to give its intended effect and/or meaning.

12.8 Method of Dispute Resolution. In the event that there arises any disagreement or dispute between the Parties that cannot be amicably resolved and which relates to the interpretation, enforcement, or violation of the terms of this Agreement, such matters will be resolved in a United States District Court in the Central District of California. If no such jurisdiction exists, then any such dispute will be resolved in a state court located in the geographic region of the Central District of California.

12.9 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

12.10 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, the Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

12.11 Confidential Information. Except as expressly provided herein, the Parties agree that, for the term of this Agreement and for five (5) years thereafter, the Recipient shall keep completely confidential and shall not publish or otherwise disclose and shall not use for any purpose except for the purposes contemplated by this Agreement any Confidential Information furnished to it by the Disclosing Party hereto pursuant to this Agreement. Each Party hereto may use or disclose Confidential Information disclosed to it by the other Party to the extent such use or disclosure is reasonably necessary in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations or otherwise submitting information to tax or other governmental authorities, conducting clinical trials, or making a permitted sublicense or otherwise exercising its rights hereunder, provided that if a Party is required to make any such disclosure of another Party’s Confidential Information, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the latter Party of such disclosure and, save to the extent inappropriate in the case of patent applications, will use its best efforts to secure confidential treatment of such information prior to its disclosure (whether through protective orders or otherwise.) Except as expressly provided herein, each Party agrees not to disclose any terms of this Agreement to any third party without the consent of the other Party; provided disclosures may be made as required by securities or other applicable laws, or to actual or prospective investors or corporate partners, or to a Party’s accountants, attorneys and other professional advisors.

12.12 Publicity. Unless required by federal and/or state law or regulation, no Party shall release any materials containing the name of another Party or any of its employees without the prior approval by an authorized representative of such Party, which approval shall not be unreasonably withheld. The Parties agree to make a mutually-agreed press release regarding this Agreement promptly following the Effective Date. Should a Party reject a proposed news release, the Parties agree to discuss the reasons for such rejection, and every effort shall be made to develop an appropriate informational news release.

12.13 Further Assurances. Each Party to this Agreement shall, at the request of the other, furnish and deliver such documents, or other further assurances as the requesting Party shall reasonably request as necessary or desirable to effect complete consummation of this Agreement and the transactions contemplated hereby.

12.14 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting party if the failure is caused by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the nonperforming party and the nonperforming party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall any party be required to settle any labor dispute or disturbance.

12.15 Survival. The following obligations shall survive the termination of this Agreement: (a) the Licensees’ obligation to supply reports covering the time periods up to the date of termination; (b) Licensor’s right to receive payments and fees, accrued or accruable, from payments at the time of any termination; (c) The Licensees’ obligation to maintain records, and Licensor’s right to have those records inspected; (d) any cause of action or claim of either party, accrued or to accrue because of any action or omission by the other; (e) The Licensees’ obligations stated in Sections V, VIII, of this Agreement; and (f) Licensees’ obligations to return all materials given to it by Licensor.

[signature page follows]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth below:

Licensor:	William Ison
	an individual and on behalf of Vaporetek



	/s/ William Ison
	William Ison



Licensees:	Vivakor, Inc.
	a Nevada corporation



	____________________________
	By:
	Its:



	VivaVentures Precious Metals, LLC
	a Nevada limited liability company



	____________________________
	By:
	Its:

Exhibit A

Description of the Extraction Technology

The vapor extraction technology developed and owned by the Vaportek Parties and licensed to VivaVentures Precious Metals, LLC and Vivakor under this Agreement and the License Agreement is a proprietary technology that extracts gold and other precious metals from sands and other sand-based ore bodies. Specifically, the technology utilizes a thermal vapor extraction process to heat salts or other detritus materials in order to extract gold and other precious metals from the materials.

Exhibit 10.16

THE INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS IN RELIANCE ON EXEMPTIONS THEREFROM. THESE INTERESTS HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH INTERESTS UNDER THE SECURITIES ACT OF 1933 AND THE REGULATIONS PROMULGATED PURSUANT THERETO (UNLESS EXEMPT THEREFROM) AND COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND REGULATIONS.

LIMITED LIABILITY COMPANY AGREEMENT
OF
VIVAVENTURES UTS I, LLC,
a Delaware limited liability company

This Limited Liability Company Agreement (this “Agreement”) is effective as of September 24, 2015 by and among VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation (“VVMCI”), as a Member (as defined below herein) and as the Manager (as defined below herein), and such other Persons who have been or may be admitted to the Company from time to time as Members (as defined below herein) and set forth in Exhibit A hereto (all of the foregoing (including VVMCI) together, collectively, the “Members” and each of them, individually, a “Member”). Certain capitalized terms used herein have the meanings set forth in Section 2.

1. ORGANIZATION

1.1 General. VivaVentures UTS I, LLC (the “Company”) was formed as a Delaware limited liability company by the execution and filing of the Certificate of Formation with the Delaware Secretary of State in accordance with the Act, and the rights and liabilities of the Members shall be as provided in the Act, as may be modified in this Agreement. In the event of a conflict between the provisions of the Act and the provisions of this Agreement, the provisions of this Agreement shall prevail unless the Act specifically provides that a Limited Liability Company Agreement may not change the provision in question.

1.2 Business Purpose. The Company may engage in any business in which a Delaware limited liability company may engage, except that the Company shall not engage in the trust company business or in the business of banking or insurance; provided, however, that, as of the effective date of this Agreement, the Company’s sole and exclusive purpose shall be to enter into a Royalty Agreement (the “VV Energy Group Royalty Agreement”) with VIVAVENTURES ENERGY GROUP, INC., a Nevada corporation (“VV Energy Group”), and be entitled to collect payments from VV Energy Group pursuant to and in accordance with the VV Energy Group Royalty Agreement.

1.3 Name and Address of Company. The business of the Company shall be conducted under the name “VivaVentures UTS I, LLC”. The principal executive office of the Company shall be at the address determined from time to time by the Manager.

1.4 Term. The term of this Agreement shall be perpetual unless sooner terminated as provided in this Agreement.

1.5 Required Filings. The Manager shall cause to be executed, filed, recorded and/or published such certificates and documents as may be required by this Agreement or by law in connection with the formation and operation of the Company.

1.6 Registered Agent. The Company’s initial registered agent shall be as provided in the Certificate of Formation. The registered agent may be changed from time to time by the Manager by causing the filing of the name of the new registered agent in accordance with the Act.

1.7 Tax Status. The Members intend that the Company be treated as a partnership for federal and state income tax purposes. Accordingly, this Agreement shall be construed in a manner consistent with the Company’s classification as a partnership for federal and state income tax purposes at all times. Neither the Company nor any Member shall take any action inconsistent with such classification.

2. DEFINITIONS

For purposes of this Agreement, the terms defined herein below shall have the following meanings unless the context clearly requires a different interpretation:

2.1 “Act” means the Delaware Limited Liability Company Act, as codified in the Delaware Code Annotated, Title 6, Sections 18-101 et seq., as the same may be amended from time to time, and including any successor statute of similar import.

2.2 “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(a) Credit to such Capital Account amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations.

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.

2.3 “Affiliate” means, with respect to any person or entity: (a) any person or entity directly or indirectly controlling, controlled by or under common control with such person or entity; (b) any person or entity owning or controlling ten percent (10%) or more of the outstanding voting securities or beneficial interests of such person or entity; (c) any officer, director, general partner, manager or trustee of, or anyone acting in a substantially similar capacity as to, such person or entity; (d) any person or entity who is an officer, director, general partner, manager, trustee or holder of ten percent (10%) or more of the voting securities or beneficial interests of any of the foregoing; and (e) any person or entity related to such person or entity within the meaning of Code Section 267(b). Notwithstanding the foregoing, VV Energy Group shall not be considered an Affiliate of the Company.

2.4 “Agreement” means this Limited Liability Company Agreement of the Company, as the same may be amended from time to time.

2.5 “Assignee” means a Person who has acquired Units in the Company from a Member or an Assignee but who is not a Substituted Member.

2.6 “Capital Account” of a Member means the capital account of that Member determined from the inception of the Company strictly in accordance with the rules set forth in Section 1.704-1(b)(2)(iv) of the Treasury Regulations. In accordance with that Section of the Treasury Regulations, a Member’s Capital Account shall be equal to the amount of money contributed by such Member and the initial Gross Asset Value of any property contributed by such Member, increased by (a) allocations of Net Income to such Member and (b) the amount of Company liabilities assumed by such Member or that are secured by any property distributed to such Member, and decreased by (v) the amount of money distributed to such Member, (w) the Gross Asset Value of any property distributed to such Member by the Company, (x) such Member’s share of expenditures of the Company described in Section 705(a)(2)(B) of the Code (including, for this purpose, losses that are nondeductible under Section 267(a)(1) or Section 707(b) of the Code), (y) the Net Loss allocated to such Member and (z) the amount of liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company. In addition, the Capital Accounts of Members may be adjusted by the Manager to reflect a revaluation of Company assets pursuant to subsection (b) or (c) of the definition of Gross Asset Value. The Capital Account of a Member shall be further adjusted as required by Section 1.704-1(b)(2)(iv) of the Treasury Regulations. To the extent that anything contained herein is inconsistent with Section 1.704-1(b)(2)(iv) of the Treasury Regulations, the Treasury Regulations shall control. The Capital Account of an Assignee shall be the same as the Capital Account of the Member from whom such Assignee acquired its interest, as further adjusted pursuant to this definition of Capital Account.

2.7 “Capital Contributions” means the total of all cash contributions and property contributions to the capital of the Company by the Members as provided in Section 3.2.

2.8 “Certificate of Formation” means the Certificate of Formation of the Company filed with the Delaware Secretary of State, as the same may be amended from time to time.

2.9 “Class A Units” means Units that have voting power pursuant to this Agreement. Except as otherwise provided in this Agreement or as otherwise required by applicable law, Members holding Class A Units will be entitled to one (1) vote per Class A Unit on all matters to be voted on by the Members holding Class

A Units.

2.10 “Class B Units” means Units that have no voting power pursuant to this Agreement. Except as otherwise provided in this Agreement or as otherwise required by applicable law, Members holding Class B Units will not be entitled to vote on any matter except to the extent otherwise required under the Act.

2.11 “Code” means the Internal Revenue Code of 1986, as amended to date, or corresponding provisions of subsequent superseding revenue laws.

2.12 “Company” means the limited liability company created pursuant to the Certificate of Formation as governed by this Agreement.

2.13 “Company Minimum Gain” with respect to any taxable year of the Company means the “partnership minimum gain” of the Company computed strictly in accordance with the principles of Section l.704-2(d) of the Treasury Regulations.

2.14 “Distributable Cash” means the amount of cash received by the Company from operations and the sale of Company assets, less all expenses attributable thereto and less amounts set aside for reasonable reserves, contingencies and anticipated obligations, each as determined by the Manager.

2.15 “Distributable Cash from Capital Events” means Distributable Cash attributable to any (i) merger, consolidation or other form of entity reorganization (other than a merger effected exclusively for the purpose of changing the domicile of the entity) in which the Members immediately before such merger, consolidation or reorganization (and before any acquisition of equity interests of the Company effected in connection with such merger, consolidation or reorganization) own less than fifty percent (50%) of the Company’s voting power (or, if the Company is not the surviving entity, less than fifty percent (50%) of the voting power of the surviving entity in such consolidation, merger or reorganization) immediately after such merger, consolidation or reorganization or (ii) sale, lease, license, transfer or other disposition of the assets of the Company other than in the ordinary course of business.

2.16 “Distributable Cash from Operations” means Distributable Cash (a) received by the Company from ordinary operations or (b) that is not Distributable Cash from Capital Events, as determined by the Manager in its commercially reasonable discretion.

2.17 “Distributions” means any cash (or property to the extent applicable) distributed to the Members or Assignees arising from their ownership of Units.

2.18 “Economic Risk of Loss” means the “economic risk of loss” within the meaning of Section 1.752-2 of the Treasury Regulations.

2.19 “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Manager;

(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Manager, as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); and (iv) the grant of an interest in the Company as consideration for the provision of services to or for the benefit of the Company; provided, however, that the adjustments pursuant to the preceding clauses (i), (ii) and (iv) shall be made only if the Manager reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(c) The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the Manager; and

(d) The Gross Asset Value of Company assets shall be increased (or decreased) to reflect adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extent that the Manager determines that an adjustment pursuant to subsection (b) above is necessary or appropriate in connection with a transaction that otherwise would result in an adjustment pursuant to this subsection (d).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subsection (a), (b) or (d) of this Section defining “Gross Asset Value,” then such Gross Asset Value thereafter shall be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Loss.

2.20 “Indemnitees” has the meaning given to such term in Section 14.1.

2.21 “Majority in Interest of the Members Holding Class A Units” means those Members holding more than fifty percent (50%) of the total number of issued and outstanding Class A Units from time to time.

2.22 “Manager” means the Person appointed or elected as the Manager pursuant to Section 5.

2.23 “Member” means any Person admitted to the Company as a Member or Substituted Member and who has not ceased to be a Member.

2.24 “Member Nonrecourse Debt” means liabilities of the Company treated as “partner nonrecourse debt” under Section 1.704-2(b)(4) of the Treasury Regulations.

2.25 “Member Nonrecourse Deductions” means in any Company fiscal year the Company deductions that are characterized as “partner nonrecourse deductions” under Section 1.704-2(i)(2) of the Treasury Regulations.

2.26 “Net Income” and “Net Loss” means the net book income or loss of the Company for any relevant period. The net book income or loss of the Company shall be computed in accordance with federal income tax principles (i) under the method of accounting elected by the Company for federal income tax purposes, (ii) as applied without regard to any recharacterization of transactions or relationships that otherwise might be required under such tax principles and (iii) as otherwise adjusted pursuant to the following provisions. The net book income or loss of the Company shall be computed, inter alia, by:

(a) including as Net Income or Net Loss, as appropriate, any adjustment to the Gross Asset Value of any Company asset pursuant to subsection (b) or (c) of Section 2.18 defining “Gross Asset Value”;

(b) including as income or deductions, as appropriate, any tax-exempt income and related expenses that are neither properly included in the computation of taxable income nor capitalized for federal income tax purposes;

(c) including as a deduction when paid or incurred (depending on the Company’s method of accounting) all amounts used to organize the Company or to promote the sale of (or to sell) Units, except that amounts for which an election is properly made by the Company under Section 709(b) of the Code shall be accounted for as provided therein;

(d) including as a deduction or loss losses incurred by the Company in connection with the sale or exchange of property, notwithstanding that such losses may be disallowed to the Company for federal income tax purposes under the related party rules of Code Sections 267(a)(1) or 707(b) or otherwise;

(e) calculating the gain or loss on disposition of Company assets and the depreciation, amortization or other cost recovery deductions, if any, with respect to Company assets by reference to their Gross Asset Value rather than their adjusted tax basis;

(f) excluding any gain or income specially allocated under Sections 4.4(e), 4.5 and 4.6; and

(g) excluding Nonrecourse Deductions.

2.27 “Net Income, Net Loss and Nonrecourse Deductions Attributable to Operations” means the Net Income, Net Loss and Nonrecourse Deductions of the Company that are attributable to the normal operations of the Company and not to dispositions of assets of the Company that are capital in nature, as determined by the Manager in its discretion. For the purpose of clarity, any book income or loss resulting from a revaluation of a Company asset that is capital in nature shall not be considered attributable to the normal operations of the Company.

2.28 “Nonrecourse Deductions” in any fiscal year means the amount of Company deductions that are characterized as “nonrecourse deductions” under Section 1.704-2(b)(1) of the Treasury Regulations.

2.29 “Nonrecourse Liabilities” means the liabilities of the Company treated as “nonrecourse liabilities” under Section 1.752-1(a)(2) of the Treasury Regulations.

2.30 “Percentage Interest” means, with respect to each Member, the percentage derived by dividing the number of outstanding Units owned by such Member by the total number of issued and outstanding Units from time to time.

2.31 “Person” means any natural person or entity and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits.

2.32 “Purchase Price” has the meaning given to such term in Section 9.4(a).

2.33 “Regulatory Allocations” has the meaning given to such term in Section 4.5.

2.34 “Substituted Member” means an Assignee who becomes a Member pursuant to Section 8.3.

2.35 “Tax Distributions” has the meaning given to such term in Section 4.4(a)(ii).

2.36 “Tax Liability” has the meaning given to such term in Section 4.4(a)(ii).

2.37 “Treasury Regulations” means the regulations of the United States Treasury Department pertaining to the Code, as amended, and all successor provisions thereto.

2.38 “Unit(s)” means a unit of measurement by which a Member’s right to vote (as applicable) and to participate in Net Income, Net Loss, Nonrecourse Deductions and Distributions shall be determined in accordance with the terms of this Agreement. “Units” may be designated as Class A Units or Class B Units. Except as otherwise provided in this Agreement or as otherwise required by applicable law, all Class A Units and Class B Units will be identical in all respects and will entitle the holders of such Units to the same rights and privileges, subject to the same qualifications, limitations and restrictions, except that, in the case of Class B Units, holders of Class B Units will not be entitled to vote on any matter except to the extent otherwise required under the Act. Notwithstanding any other provision of this Agreement, Class A Units or Class B Units may not be subdivided (by Unit split or distribution of Units), combined or reclassified unless the Units of the other class of Units are concurrently therewith proportionately subdivided (by Unit split or distribution of Units), combined or reclassified in a manner that maintains the same proportionate equity ownership (and same proportionate voting power, as applicable) among the holders of Class A Units and Class B Units on the record date for such subdivision (by Unit split or distribution of Units), combination or reclassification.

2.39 “VV Energy Group” has the meaning given to such term in Section 1.2.

2.40 “VV Energy Group Royalty Agreement” has the meaning given to such term in Section 1.2.

3. UNITS; CAPITAL

3.1 Units Generally.

(a) Authorized Units. The total number of Units that the Company currently is authorized to issue is 1,001,000 Units, of which, as of the effective date of this Agreement, 1,000 Units are designated Class A Units (“Class A Units”), and 1,000,000 Units are designated Class B Units (“Class B Units”). In each case pursuant to the consent of a Majority in Interest of Members Holding Class A Units, the Manager is authorized, from time to time, to increase the total number of Units that the Company is authorized to issue and to designate additional Classes of Units and series of Classes of Units. Subject to the preceding sentence, the rights of all Units are subject to the rights of any and all future Classes or series of Classes of Units, which from time to time may be authorized and issued in accordance with this Agreement and applicable law.

(b) Issuance of Units. The authorized Class A Units have been issued and allocated as set forth in Exhibit A hereto. Class B Units may be issued by the Manager from time to time and set forth in Exhibit A hereto.

3.2 Capital Contributions.

(a) Initial Contributions.

(i) Contribution by VVMCI. Upon the execution of this Agreement by VVMCI, VVMCI contributes to the Company cash in the amount of One Thousand Dollars ($1,000) in exchange for the Company’s issuance of Class A Units to VVMCI in the amount set forth in Exhibit A hereto.

(ii) Contribution by Other Members. Upon the execution or adoption of this Agreement by each other Member, such Member shall contribute to the Company such consideration or other property as the Manager may determine in exchange for the Company’s issuance of Class B Units to such Member in the amount set forth in Exhibit A hereto.

(b) Subsequent Contributions. No Member will be required to contribute additional capital to the Company. No Member will be permitted to contribute additional capital or loan money to the Company without the approval of the Manager and on such terms as the Manager shall determine.

3.3 Interest. No Member will receive interest on its contribution to the capital of the Company.

3.4 Withdrawal and Return of Capital. Except as may be provided herein, no Member may withdraw any portion of the capital of the Company, and no Member will be entitled to the return of its contribution to the capital of the Company except upon dissolution of the Company in accordance with Section 13.3.

3.5 Capital Accounts.

(a) Member Capital Accounts. An individual Capital Account shall be maintained for each Member.

(b) Capital Account of Assignee. Upon any sale or transfer of Units, the Capital Account of the transferor with respect to the Units transferred shall become the Capital Account of the Assignee or Substituted Member, as applicable, with respect to such Units, as such Capital Account existed at the effective date of the transfer of such Units.

(c) Deficit Capital Account. Except as otherwise required by the Act, no Member will have any liability to the Company, to any other Member or to the creditors of the Company on account of any deficit Capital Account balance.

4. FINANCIAL

4.1 Accounting Method. The Company books shall be kept in accordance with the method of accounting as determined by the Manager.

4.2 Fiscal Year. The fiscal year of the Company shall end on December 31, unless the Manager determines that some other fiscal year would be more appropriate and obtains the consent, if required, of the Internal Revenue Service to use that other fiscal year.

4.3 Expenses of the Company. The Company shall pay to or reimburse the Members and the Manager for any and all expenses incurred by a Member or the Manager, as the case may be, on behalf of the Company, including the organizational expenses of the Company (including legal and filing fees), the operational expenses of the Company and all expenses incurred in connection with investigating, purchasing, operating and disposing of any Company property; provided, however, that a Member or the Manager shall not incur expenses on behalf of the Company or be reimbursed for expenses that are not related to the business of the Company and, in the case of a Member, shall only be reimbursed for expenses approved by the Manager in accordance with Section 5.

4.4 Net Income, Net Loss, Nonrecourse Deductions and Distributions.

(a) Distributions.

(i) General. Other than Tax Distributions (as defined below in this Section 4.4(a)), Distributable Cash shall be distributed at such times as determined by the Manager and, when distributed, shall be distributed to the Members in accordance with the following order of priority:

(A) Distributable Cash from Operations. Distributable Cash from Operations shall be distributed to the Members in accordance with their Percentage Interests.

(B) Distributable Cash from Capital Events. Distributable Cash from Capital Events shall be distributed to the Members in proportion to their relative Capital Account balances after giving effect to Sections 4.4(b), 4.4(c), 4.4(e), 4.5 and 4.6.

(ii) Tax Distributions. Notwithstanding anything to the contrary in Section 4.4(a)(i), the Manager shall distribute Distributable Cash to each Member in an amount sufficient to pay the federal and state income tax on the taxable income allocated to such Member pursuant to this Agreement in order to provide cash to the Members to pay taxes on the taxable income so allocated and not yet distributed (“Tax Distributions”). Tax Distributions may be made at least annually so as to enable the Members to satisfy their annual federal and state tax payment obligations; provided, however, that Tax Distributions shall be made only to the extent that cumulative Distributions under Section 4.4(a)(i) are less than such Member’s Tax Liability (as defined below). Any amount distributed to a Member pursuant to this Section 4.4(a)(ii) shall be treated as an advance against other Distributions to which such Member is entitled and shall be credited against and subtracted from the other Distributions to which such Member is entitled, which subtraction shall be from the next Distribution to which such Member is entitled and, if any creditable amount remains thereafter, from the next immediate Distribution until fully credited. Any amount credited to a Distribution pursuant to the foregoing sentence shall be deemed distributed for purposes of the Distribution against which it is credited. The amount of any such Member’s “Tax Liability” shall be calculated (A) taking into account the character of the cumulative Company net taxable income allocated to such Member, (B) taking into account the deductibility (to the extent allowed) of state and local income taxes for United States federal income tax purposes and (C) deducting from such income or gain the amount of net cumulative tax loss previously allocated to such Member in prior fiscal years and not used in prior fiscal years to reduce taxable income. The calculation shall be made on the assumptions that (1) taxable income or tax loss from the Company is the only taxable income or tax loss of the Member (and the direct or indirect equity holders of such Member), and (2) except as provided in clause (A) of this definition, the Member is subject to tax at a rate equivalent to the maximum marginal combined federal and state income tax rate for an individual residing in the state of such Member’s primary residence.

(iii) Withholding. The Company may be required under applicable state or federal law to withhold on amounts distributed or allocated to a Member. In that event, the Manager may, but is not required to, either (A) make equivalent distributions to the non-affected Members or (B) require that the affected Members immediately contribute the amount of withholding to the Company. Any amount withheld with respect to a Member pursuant to this Section 4.4(a)(iii) (and that is not immediately contributed to the Company by such Member) shall be treated as an advance against other Distributions to which such Member is entitled and shall be credited against and subtracted from the other Distributions to which such Member is entitled, which subtraction shall be from the next Distribution to which such Member is entitled and, if any creditable amount remains thereafter, from the next immediate distribution until fully credited. Any amount credited to a Distribution pursuant to the foregoing sentence shall be deemed distributed for purposes of the Distribution against which it is credited.

(iv) Distributions in Kind. No right is given to any Member to demand or receive property or cash other than as provided in this Agreement. The Manager may determine to make a Distribution in kind of Company property to the Members, and such property shall be distributed such that the fair market value thereof, as determined by the Manager, is distributed in accordance with Section 4.4(a)(i).

(b) Allocations of Net Income, Net Loss and Nonrecourse Deductions Attributable to Operations. Subject to Sections 4.4(e), 4.5 and 4.6, Net Income, Net Loss and Nonrecourse Deductions Attributable to Operations shall be allocated among the Members in accordance with their Percentage Interests.

(c) Other Net Income, Net Loss and Nonrecourse Deductions. Subject to Sections 4.4(e), 4.5 and 4.6, Net Income, Net Loss and Nonrecourse Deductions that are not Net Income, Net Loss and Nonrecourse Deductions Attributable to Operations, as determined by the Manager in its discretion, shall be allocated among the Members as follows:

(i) Net Income. Net Income that is not attributable to operations shall be allocated among the Members in such a manner that the sum of (A) the Capital Account of each Member, (B) each Member’s share of Company Minimum Gain (as determined according to Treasury Regulation Section 1.704-2(g)) and (C) each Member’s partner nonrecourse debt minimum gain (as defined in Treasury Regulation Section 1.704-2(i)(3)) shall be in proportion to their respective Percentage Interests.

(ii) Net Loss and Nonrecourse Deductions. Subject to Section 4.6, Net Loss and Nonrecourse Deductions that are not attributable to operations shall be allocated among the Members in proportion to their relative Capital Account balances.

(d) Tax Allocations. Except for the allocations contained in Section 4.4(e)(i), all income, gains, losses, deductions and credits of the Company shall be allocated for federal, state and local income tax purposes in accordance with the allocations of Net Income and Net Loss.

(e) Special Allocations. The following special allocations shall be made:

(i) Code Section 704 Allocations. In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss and deductions with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of the variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value.

In the event that the Gross Asset Value of any Company asset is adjusted due to a revaluation of Company assets under Treasury Regulations Section 1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss and deductions with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Treasury Regulations thereunder.

Notwithstanding anything to the contrary herein, the Manager may allocate income, gains, losses, deductions and credits of the Company pursuant to this Section 4(e)(i) to one or more Members in the event of a redemption of all or any portion of a Member’s interest, in such manner as the Manager deems necessary to equitably account for such items.

All elections or other decisions relating to such allocations shall be made by the Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 4.4(e)(i) are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Loss, other items or distributions pursuant to any provision of this Agreement.

(ii) Recapture. In the event that the Company has taxable income that is characterized as ordinary income under the recapture provisions of the Code, each Member’s distributive share of taxable gain or loss from the sale of Company assets (to the extent possible) shall include a proportionate share of this recapture income equal to such Member’s prior share of prior cumulative depreciation deductions with respect to the assets that gave rise to the recapture income.

(iii) Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, in the event that there is a net decrease in the Company Minimum Gain during any taxable year, each Member shall be allocated items of income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in such Company Minimum Gain during such year in accordance with Section 1.704-2(g) of the Treasury Regulations. This Section 4.4(e)(iii) is intended to comply with the minimum gain chargeback requirement of Section 1.704-2(f) of the Treasury Regulations and shall be interpreted consistent therewith.

(iv) Member Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, in the event that there is a net decrease in the minimum gain attributable to a Member Nonrecourse Debt during any taxable year, each Member with a share of such minimum gain shall be allocated income and gain for such year (and, if necessary, subsequent years) in accordance with Section 1.704-2(i) of the Treasury Regulations. This Section 4.4(e)(iv) is intended to comply with the chargeback requirement of Section 1.704-2(i)(4) of the Treasury Regulations and shall be interpreted consistent therewith.

(v) Qualified Income Offset. Any Member who unexpectedly receives an adjustment, allocation or distribution described in subparagraphs (4), (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations, which adjustment, allocation or distribution creates or increases a deficit balance in such Member’s Capital Account, shall be allocated items of “book” income and gain in an amount and manner sufficient to eliminate or to reduce the deficit balance in such Member’s Capital Account so created or increased as quickly as possible in accordance with Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and its requirements for a “qualified income offset.” The Members intend that the provision set forth in this Section 4.4(e)(v) will constitute a “qualified income offset” as described in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistent therewith.

(vi) Member Nonrecourse Deductions. After the allocations of Net Loss and Nonrecourse Deductions, Member Nonrecourse Deductions shall be allocated among the Members as required in Section 1.704-2(i)(1) of the Treasury Regulations, in accordance with the manner in which the Member or Members bear the Economic Risk of Loss for the Member Nonrecourse Debt corresponding to the Member Nonrecourse Deductions, and, if more than one Member bears such Economic Risk of Loss for a Member Nonrecourse Debt, the corresponding Member Nonrecourse Deductions must be allocated among such Members in accordance with the ratios in which the Members share the Economic Risk of Loss for the Member Nonrecourse Debt.

(vii) Code Section 754 Adjustment. To the extent that an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution to a Member in complete liquidation of such Member’s interest, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specifically allocated to the Members in accordance with their interests in the Company in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies or to the Members to whom such distribution was made in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(viii) Allocations Relating to Taxable Issuance of Company Interests. Any income, gain, loss or deduction realized as a direct or indirect result of the issuance of an interest in the Company to a Member (the “issuance items”) shall be allocated among the Members so that, to the extent possible, the net amount of such issuance items, together with all other allocations under this Agreement to each Member, shall be equal to the net amount that would have been allocated to each such Member of the issuance items had not be realized.

(f) Varying Interests. Where any Member’s interest, or portion thereof, is acquired or transferred during a taxable year or for any other purpose requiring the determination of Net Income, Net Loss or other items allocable to any period, the Manager may choose to implement the provisions of Section 706(d) of the Code in allocating among the varying interests.

(g) Excess Nonrecourse Liabilities. Solely for purposes of determining a Member’s proportionate share of the “excess nonrecourse liabilities” of the Company within the meaning of Treasury Regulations Section 1.752-3(a)(3), the Members’ interests in Company profits are in proportion to their Percentage Interests.

(h) Consent of Member. The Members are aware of the income tax consequences of the methods, hereinabove set forth, by which Net Income, Net Loss and Distributions are allocated and distributed and hereby agree to be bound by them in reporting them for income tax purposes. The Members hereby expressly consent to such provisions as an express condition of becoming a Member.

4.5 Curative Allocations. The allocations set forth in Sections 4.4(e)(iii), (iv), (v), (vi) and (vii) and the allocations of Nonrecourse Deductions in Section 4.4(b) (the “Regulatory Allocations”) are intendedto comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 4.5. Therefore, notwithstanding any other provision of this Section 4 (other than the Regulatory Allocations), the Manager shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance that such Member would have had if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to Section 4.4(b). In exercising its discretion under this Section 4.5, the Manager shall take into account future Regulatory Allocations under Sections 4.4(e)(iii) and (iv) that, although not yet made, are likely to offset Regulatory Allocations made under Section 4.4(b) and Section 4.4(e)(vi).

4.6 Loss Limitation. Net Loss and Nonrecourse Deductions allocated pursuant to Section 4.4(b) shall not exceed the maximum amount of Net Loss and Nonrecourse Deductions that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any fiscal year. In the event that some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of allocations of Net Loss and Nonrecourse Deductions pursuant to Section 4.4(b), the limitations set forth in this Section 4.6 shall be applied on a Member by Member basis, and Net Loss and Nonrecourse Deductions not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member’s Capital Accounts so as to allocate the maximum permissible Net Loss and Nonrecourse Deductions to each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). If Net Loss or Nonrecourse Deductions are allocated to a Member pursuant to this Section 4.6, then thereafter income of the Company shall first be allocated among the Members to offset in reverse order the allocations of Loss and Nonrecourse previously made pursuant to this Section 4.6.

4.7 Tax Elections. The Manager shall, without further consent of the Members being required (except as specifically required herein), have the authority to make any and all elections for federal, state and local tax purposes, including any election, if permitted by applicable law, to adjust the basis of Company property pursuant to Code Sections 754, 734(b) and 743(b) or comparable provisions of state or local law in connection with transfers of interests in the Company and Company distributions.

5. MANAGEMENT

5.1 Management of the Company. Subject to the provisions of this Agreement relating to actions required to be approved by the Members, the Company’s business, property and affairs shall be managed and all powers of the Company shall be exercised by or under the direction of a single Manager (the “Manager”). The Manager shall be appointed or elected in accordance with Section 5.3. Except as otherwise set forth in this Agreement, the Manager shall have all authority, rights and powers conferred by law and those necessary or appropriate to carry out the purposes of the Company as set forth in Section 1.2. Unless otherwise expressly provided in this Agreement, action by the Manager shall not require the vote or written consent of any Member, including any Member holding Class A Units.

5.2 Agency Authority of Manager. The Manager shall have all authority, rights and powers as a Manager, to the maximum extent authorized and permitted by the Act, to conduct or engage in all matters of ordinary and customary business activity on behalf of the Company.

5.3 Appointment or Election of Manager.

(a) Number. The authorized number of Managers shall be one (1). The number of Managers shall not be changed or be subject to being changed at any time for any reason.

(b) Tenure. Unless such Person resigns or is removed, the Manager shall hold office until a successor has been appointed or elected and qualified.

(c) Appointment or Election; Qualifications of Manager; Vote Required. The Manager shall be appointed or elected in accordance with this Section 5.3(c). The Manager shall be appointed or elected exclusively pursuant to the consent of a Majority in Interest of the Members Holding Class A Units. The Manager need not be a Member, an individual, a resident of the State of Delaware or a citizen of the United States. The initial Manager shall be VVMCI.

(d) Resignation. The Manager may resign at any time by giving written notice of resignation to the Members. The resignation of a Manager who also is a Member, or associated with a Member, shall not affect such resigned Manager’s rights as a Member and shall not constitute a withdrawal of that Member.

(e) Removal. The Manager may be removed as such with or without cause only pursuant to the consent of a Majority in Interest of the Members Holding Class A Units. The removal of any Manager who also is a Member, or associated with a Member, shall not affect such removed Manager’s rights as a Member and shall not constitute a withdrawal of that Member.

(f) Vacancies. Any vacancy in the office of the Manager that occurs for any reason shall be filled by appointment pursuant to the consent of a Majority in Interest of the Members Holding Class A Units.

5.4 Responsibilities of the Manager. The Manager shall devote such time to administering the business of the Company as the Manager reasonably deems necessary to perform the Manager’s duties as such as set forth in this Agreement. Nothing in this Agreement shall preclude the employment by the Company of any agent or third party to provide services in respect of the business of the Company; provided, however, that the Manager shall continue to have ultimate responsibility for the Company’s business, property and affairs under this Agreement. The Manager shall cause to be filed such certificates or filings as may be required for the continuation and operation of the Company as a limited liability company in any state in which the Company elects to do business.

5.5 Meetings of the Manager; Action by Written Consent. Nothing in this Agreement is intended to require that meetings of the Manager be held, it being the intent of the Members that meetings of the Manager are not required. Any action required or permitted to be taken by the Manager may be taken by the Manager without a meeting, if the Manager approves such action in writing before such action. Such action by written consent shall have the same force and effect as a vote of the Manager at a meeting of the Manager.

5.6 Compensation of the Manager. The Manager shall not be entitled to compensation for services in its capacity as the Manager.

5.7 Tax Matters Partner. If required by Section 6231(a)(7) of the Code, the Manager shall appoint a “Tax Matters Partner” in accordance with such Section, and in connection therewith and in addition to all the powers given thereunder, the Tax Matters Partner shall have all other powers needed to fully perform hereunder, including the power to retain all attorneys and accountants of such Tax Matters Partner’s choice. The initial Tax Matters Partner shall be VVMCI (i.e., the Manager). The designation made in this Section is hereby expressly consented to by each Member as an express condition to becoming a Member.

5.8 Appointment and Duties of Officers. In connection with the management of the operations and affairs of the Company, the Manager may appoint such officers of the Company as the Manager deems necessary, including a President, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer and a Secretary. Each officer shall exercise such powers and perform such duties as are determined by the Manager, and, if not specifically set forth by the Manager, each officer shall have those duties and have such authority as is typically provided to an officer of a corporation holding the same position. The Manager shall have the discretion to set the terms of employment of each officer, including the term of office and the compensation paid to each officer. An officer need not be a Member of the Company.

6. LIABILITY, RIGHTS, AUTHORITY AND VOTING OF MEMBERS

6.1 Liability of Members. Except as specifically provided in this Agreement or the Act, the Members shall not be liable for the debts, liabilities, contracts or other obligations of the Company except with respect to their Capital Contributions as indicated herein. Only the Company or the Manager (and no third party creditor, either in its own right or as a successor-in-interest of the Company, and including a trustee, receiver or other representative of the Company or a Member) shall be entitled to enforce the requirements to make Capital Contributions. The Members intend and agree that the obligation of the Members to make Capital Contributions constitutes an agreement to make financial accommodations to and for the benefit of the other Members and the Company.

6.2 Members are not Agents. Pursuant to Section 5, the management of the Company is vested in the Manager. No Member, acting solely in the capacity of a Member, is an agent of the Company, nor can any Member in such capacity bind or execute any instrument on behalf of the Company, except as expressly provided in Section 5.

6.3 Voting. The voting rights of the Members shall be based on the following:

(a) To the extent that holders of Units in the Company are provided with the right to vote hereunder or as required under the Act, such Units shall have the right to vote on a one (1) vote per Unit basis. Assignees who have not become Substituted Members shall not be entitled to vote, and all voting rights associated with the Units transferred to such Assignee shall remain with the transferring Member.

(b) Notwithstanding Section 6.3(a), any action in which the Members are entitled to vote may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, is signed by those Members representing the requisite vote that would be necessary to authorize or take such action at a meeting at which all Members entitled to vote thereon were present and voted. Each Member entitled to vote pursuant to this Agreement shall be notified of any action so taken within thirty (30) days of its approval if such action is material to the operation of the Company’s business, as determined by the Manager.

6.4 Meetings of Members. The Manager shall have the discretion to call meetings of the Members; provided, however, that nothing in this Agreement will be interpreted to require that meetings of the Members be held, it being the intent of the Members that meetings of the Members are not required.

6.5 Limitation of Rights of Members. No Member will have the right or power to: (a) withdraw or reduce its Capital Contribution, except as a result of the dissolution of the Company or as otherwise provided in this Agreement or by law; (b) bring an action for partition against the Company; or (c) demand or receive property in any distribution other than cash. Except as otherwise provided in this Agreement, no Member will have priority over any other Member either as to the return of Capital Contributions or as to allocations of the Net Income, Net Loss or Distributions of the Company.

6.6 Return of Distributions. In accordance with the Act, a Member may, under certain circumstances, be required to return to the Company, for the benefit of the Company’s creditors, amounts previously distributed to such Member.

6.7 Resignation or Withdrawal of a Member. A Member shall not resign or withdraw as a Member without the consent of the other Member or Members.

7. AMENDMENTS

This Agreement and the Certificate of Formation may not be amended without the approval of the Manager and the unanimous written consent of the Members holding Class A Units. By executing or adopting this Agreement, each Member hereby consents to the admission of additional Members and Substituted Members upon the consent of the Manager in compliance with this Agreement. Amendments to this Agreement for the admission of any Member or Substituted Member shall not, if in accordance with the terms of this Agreement, require the consent of any Member, including any Member holding Class A Units. The Manager shall have the right at any time and from time to time to modify and update Exhibit A hereto to reflect changes in the information set forth therein caused by events or transactions effected in accordance with this Agreement, and no such modification or update of Exhibit A hereto will require the consent or approval of any Member, including any Member holding Class A Units.

8. TRANSFERS OF UNITS

8.1 Assignment of Units.

(a) Transferability. Except as otherwise expressly provided in this Agreement, each Member agrees that such Member shall not transfer, assign or in any way alienate any of such Member’s Units, or any right or interest therein, whether voluntarily or by operation of law, or whether during lifetime or upon death by will or otherwise, without the prior written consent of the Manager, the granting or denial of which shall be within the sole and absolute discretion of the Manager. Each Member agrees that such Member shall not hypothecate or otherwise create or suffer to exist any lien, claim or encumbrance on any of such Member’s Units at any time subject hereto, other than the encumbrance created by this Agreement. Any purported transfer of Units in violation of any provision of this Agreement shall be void and ineffectual, shall not operate to transfer any interest or title to the purported transferee and shall give the Company and the non-transferring Members an option to purchase such Units in the manner and on the terms and conditions provided for herein.

Any transferee of Units in compliance with this Section 8.1 and Section 8.2 shall merely be an Assignee possessing only an economic interest and shall not become a Substituted Member except upon compliance with Section 8.3. A Member assigning all or any portion of such Member’s Units to an Assignee shall not assign to, or obligate itself to act on behalf of or upon the direction of that Assignee with regard to, such Member’s right:

(i) to require any information from the Company or obtain accountings of the Company’s activities;

(ii) to inspect the Company’s books and records; or

(iii) to vote on any matter on which a Member is entitled to vote pursuant to either this Agreement or any applicable law.

(b) Permitted Transfers. Notwithstanding this Section 8.1, a Member that is an individual may transfer, for estate planning purposes, all or any portion of such Member’s Units to a trust for the sole benefit of such Member and/or such Member’s spouse or issue, without such transfer being subject to the Manager consent requirement set forth in Section 8.1(a) or the Right of First Refusal set forth in Section 8.2, provided that a transferring Member shall continue to have sole voting control of such transferred Units, that such transferred Units shall remain subject to all of the terms and conditions contained herein and that no further transfer of such Units shall be permitted unless such transfer complies with all of the terms and conditions of this Agreement. In the event of a transfer to a trust, all notices required by this Agreement shall be given to both the transferring Member and to the trustee or the successor trustee of such trust.

(c) Distributions, Allocations and Reports. An Assignee shall be entitled to receive Distributions from the Company attributable to the Units acquired by reason of such assignment from and after the effective date of the assignment of such Units to such Assignee; provided, however, that, anything herein to the contrary notwithstanding, the Company shall be entitled to treat the assignor of such Units as the absolute owner thereof in all respects and shall incur no liability for allocations of Net Income or Net Loss, Distributions or for the transmittal of reports and notices required to be given to Members hereunder that are made in good faith to such assignor until such time as the written instrument of assignment has been received by the Company and recorded on its books, and the effective date of assignment has passed.

(d) Consent to Transfer Restrictions. Each Member acknowledges the reasonableness of the restrictions on transfer imposed by this Agreement in view of the purposes of the Company, its status as a limited liability company and the relationship of its Members. The transfer restrictions contained herein are expressly consented to by each Member as an express condition of becoming a Member.

8.2 Right of First Refusal.

(a) The Company’s Right of First Refusal. Except as otherwise provided herein, if a Member decides to sell or transfer all or any portion of such Member’s Units (“Offered Units”) pursuant to a bona fide offer, then such Member shall give written notice, setting forth in full the terms of such bona fide offer and the identity of the offeror(s), to the Company and the non-transferring Members (the “Notice”). As set forth in Section 8.1(a), the Offered Units may not be transferred unless the Manager consents to the proposed transfer. In the event that the Manager consents to the proposed transfer, for thirty (30) days following the receipt of the Notice by the Company and the non-transferring Members, the Company shall have the right to purchase the Offered Units for the consideration and according to the terms of payment stated in the Notice. The Company’s right accorded hereunder shall be exercised only upon the consent of the Manager. Such right shall be exercised by delivering to the transferring Member a written election to purchase the Offered Units and may not be exercised as to less than all of the Offered Units proposed to be transferred, unless the non-transferring Members exercise such non-transferring Members’ right (as provided below) to purchase any of the Offered Units not purchased by the Company so that, between the Company and such non-transferring Members, all of the Offered Units are purchased.

(b) Members’ Right of First Refusal. If such right is not exercised by the Company as to all of the Offered Units proposed to be transferred within the thirty (30) day period prescribed above, then notice of the contemplated transfer shall be given forthwith by registered or certified mail to the non-transferring Members, who shall have the right to purchase Offered Units not to be purchased by the Company (the “Remaining Offered Units”) for the consideration and according to the terms of payment on which the Company was entitled to purchase such Offered Units under the foregoing provisions. Within fifteen (15) days after the mailing of such notice, if the non-transferring Members desire to acquire all or any portion of the Remaining Offered Units, then such Members shall deliver to the Secretary (or to the Company in the event that there is no Secretary) a written election to purchase such Remaining Offered Units or a specified number thereof. Subject to the foregoing, each non-transferring Member shall have the right to elect to purchase all or any portion of such non-transferring Member’s pro rata share of the Remaining Offered Units (with any reallotment as provided below in this Agreement). Each such non-transferring Member’s pro rata share of the Remaining Offered Units shall be a fraction of the Remaining Offered Units, of which the number of Units owned by such non-transferring Member on the date of the Notice shall be the numerator, and the total number of Units owned by all of the non-transferring Members on the date of the Notice shall be the denominator. Each non-transferring Member shall have a right of reallotment such that, if any other non-transferring Member fails to exercise the right to purchase such non-transferring Member’s full pro rata share of the Remaining Offered Units, then the participating non-transferring Members may exercise an additional right to purchase, on a pro rata basis, the Remaining Offered Units not previously purchased.

(c) Consideration Other Than Cash. If the Company and/or the non-transferring Members elect to purchase all of the Offered Units mentioned in the Notice, then the Company and the non-transferring Members shall have the right to purchase the Offered Units for cash consideration, whether or not part or all of the consideration specified in such Notice is other than cash. If part or all of the consideration to be paid for the Offered Units as stated in the Notice is other than cash, then the price stated in such Notice shall be deemed to be the sum of the cash consideration, if any, specified in such Notice plus the fair market value of the non-cash consideration. If the parties are unable to agree upon the fair market value of the non-cash consideration, then the fair market value shall be determined in the manner set forth in Section 9.4(b), which determination shall be conclusive and binding on all of the parties.

(d) Closing. If the Company and/or the non-transferring Members have contracted to purchase all of the Offered Units, then the closing of the purchase and sale shall occur at the offices of the Company at 10:00 a.m. on the thirtieth (30th) day following the giving by the Company to the transferring Member of notice of either (i) its election to purchase all of the Offered Units pursuant to Section 8.2(a) or (ii) the final allocation of such Units pursuant to Section 8.2(b), as the case may be, or at such other time and place as may be mutually agreed to in writing by the Company and/or the purchasing Members and the transferring Member (the “Closing”). At the Closing, the transferring Member shall deliver to the Company and/or the purchasing Members, as the case may be, a certificate or certificates (if applicable) representing the transferring Member’s Units duly endorsed for transfer, and the Company and/or the purchasing Members, as the case may be, shall deliver to the transferring Member cash (or a certified or cashier’s check) for the amount of the cash consideration and any other consideration to be paid by the Company and/or the purchasing Members for the Units that they have contracted to purchase. The transferring Member and the Company and/or the purchasing Members, as the case may be, shall each execute and deliver such other documents as may reasonably be requested by any of the parties mentioned above in connection with the transactions contemplated in this Agreement.

(e) Failure to Exercise Right of First Refusal. In the event that the Company and/or the purchasing Members fail to tender the required consideration at the Closing, or the Company and such Members do not elect to purchase all of the Offered Units set forth in the Notice within the time periods specified above, then all of the Offered Units may be transferred by the transferring Member at any time within ninety (90) days from the date of receipt of the Notice by the Company to the person and for the consideration and on the terms and conditions specified in the Notice, provided that such transferee executes a counterpart of this Agreement concurrently with the purchase of such Units. Any transfer of the Offered Units after the end of the ninety (90) day period or any change in the terms of the sale from the terms set forth in the original Notice shall require a new notice of intent to transfer delivered to the Company and shall give rise anew to the rights provided in the preceding paragraphs.

8.3 Substituted Members.

(a) Conditions of Substitution. An Assignee may have the right to become a Substituted Member in place of such Assignee’s assignor only if all of the following conditions are first satisfied:

(i) Written Assignment. A duly executed and acknowledged written instrument of assignment shall have been filed with the Company, which instrument shall specify the number of Units in the Company being assigned, and which instrument sets forth the intention of the assignor that the Assignee succeed to the assignor’s Units as a Substituted Member in such assignor’s place;

(ii) Instruments of Substitution. The Assignee shall have executed and acknowledged such other instruments as may be necessary or desirable to effect such substitution, including the written acceptance and adoption by the Assignee of the provisions of this Agreement; and

(iii) Consent of Manager. The written consent to such substitution shall have been obtained from the Manager, the granting or denial of which shall be within the sole and absolute discretion of the Manager.

9. OPTION TO PURCHASE UNITS UPON SPECIFIED EVENTS

9.1 Option to Purchase. Upon the occurrence of any of the following events (each referred to hereinafter as an “Option Event”) affecting a Member (the “Affected Member”), the Company and then the other Members shall have the option to purchase the number of Units of the Affected Member as described in Section 9.2, for the price and on the terms set forth in Sections 9.3 and 9.4; provided, however, that no Option Event shall be deemed to occur (and this Section 9 shall not apply) if the Manager consents to any assignment or transfer (or potential assignment or transfer) resulting from an event described below (which consent may not be unreasonably withheld) as if such assignment or transfer were made by the Affected Member pursuant to Section 8.1:

(a) The maintenance of any proceeding initiated by or against a Member under any bankruptcy or debtors’ relief law of the United States or of any other jurisdiction, which proceeding is not terminated within ninety (90) days after its commencement;

(b) A general assignment for the benefit of the creditors of a Member;

(c) A levy upon the Units of a Member pursuant to a writ of execution or subject to the authority of any governmental entity, which levy is not removed within thirty (30) days, and only to the extent of the Units subject to such levy;

(d) The entry of a Final Judgment of Dissolution of Marriage of a Member if in connection with such dissolution the spouse of such Member is awarded Units or any interest therein as a result of a property settlement agreement or otherwise, but in such event such option to purchase shall extend only to such spouse’s Units or interest therein. In such event, the Units of such spouse or such spouse’s interest therein shall be deemed to be the “Units of the Affected Member” for the purposes of this Agreement;

(e) With respect to Units transferred by a Member pursuant to Section 8.1(b), the loss of sole voting control over such Units by the transferring Member or such Units becoming no longer subject to such trust, unless such Units are returned to the original transferor thereof. In such event, the Units so transferred shall be deemed to be the “Units of the Affected Member” for the purposes of this Agreement;

(f) The death of a Member (the “Deceased Member”) or upon the death of any spouse of a Member who has acquired any interest in such Member’s Units subject to such spouse’s disposition by will or otherwise at such spouse’s death if such spouse’s death occurs before such Member’s death (the “Deceased Spouse”); provided, however, that the prior death of a spouse of a Member shall not give rise to an option to purchase such Deceased Spouse’s interest in a Member’s Units by the Company or the other Members if, as a result of such spouse’s death, such spouse’s Units or interest therein pass or will pass by will or otherwise to the Member outright or to a trust pursuant to which the Member has sole voting control of such Units; provided further that, at such time that the Member ceases to have sole voting control over Units or over any interest therein transferred to trust or the Units or interest therein are distributed free of trust to other than such Member, the cessation of such voting control or distribution free of trust shall give rise at such time to an option to purchase such Units or interest therein as though the Deceased Spouse had then died without leaving the Deceased Spouse’s Units to the Member or to a trust over which such Member has sole voting control of such Units or interest therein. In the event of the prior death of a spouse of a Member, such spouse and the interest of such spouse in Units of the Member shall be deemed to be the “Affected Member” and the “Units of the Affected Member,” respectively, for the purposes of this Agreement. Notwithstanding anything to the contrary hereinabove, if the Deceased Spouse of a Member leaves such Deceased Spouse’s interest in such Member’s Units in a manner that would otherwise give rise to an option to purchase such interest by the Company and/or the remaining Members, then such Member shall have the first option to purchase any such interest of his or her Deceased Spouse for the price and on the terms specified in Sections 9.4 and 9.5.

9.2 Exercise of Option. The Affected Member or the Affected Member’s legal representative shall give written notice to the Company and the non-transferring Members immediately upon the occurrence of an Option Event and in no event more than ten (10) days after the occurrence of such Option Event or the appointment of a legal representative for such Affected Member, whichever occurs last. Upon receipt of written notice of the occurrence of an Option Event and for a period of thirty (30) days thereafter, the Company shall have the first option to purchase all or any portion of the Units of the Affected Member subject to repurchase pursuant to Section 9.1, provided that, in the event of the dissolution of the marriage of a Member, or on the occurrence of an Option Event within the meaning of Section 9.1(e) or (f), the divorced, transferring or widowed Member, as the case may be, shall have during the first fifteen (15) days of such thirty (30) day period a concurrent but priority right to purchase the Units or interest therein that have been awarded to such Member’s spouse as a result of the dissolution of such Member’s marriage or with respect to which such Member was the transferring Member under Section 8.1(b), or which are not distributed to such Member outright or to a trust over which such Member has sole voting control. In the event that the Company and, in any situation where a divorced, transferring or widowed Member has a concurrent but priority option to purchase, such Member does not elect to purchase all of the Units within such thirty (30) day period, the Company shall forthwith notify the non-transferring Members of the election not to purchase all or a portion of the Affected Member’s Units, and such non-transferring Members shall then have the option for a period of fifteen (15) days from the receipt of such notice to purchase the Units of the Affected Member not purchased by the Company and/or the divorced, transferring or widowed Member (the “Remaining Units of the Affected Member”). Within fifteen (15) days after the receipt of such notice, if the non-transferring Members desire to acquire all or any portion of the Remaining Units of the Affected Member (the “Purchasing Members”), then the Purchasing Members shall deliver to the Secretary (or to the Company in the event that there is no Secretary) a written election to purchase such Remaining Units of the Affected Member or a specified number thereof. Except upon the occurrence of the death of a Deceased Member or Deceased Spouse, as hereinabove defined, the option set forth in this Section 9 may not be exercised unless the Company and/or the Purchasing Members purchase all of the Units of the Affected Member. Subject to the foregoing, each non-transferring Member shall have the right to elect to purchase all or any portion of such non-transferring Member’s pro rata share of the Remaining Units of the Affected Member (with any reallotment as provided below in this Agreement). Each such non-transferring Member’s pro rata share of the Remaining Units of the Affected Member shall be a fraction of the Remaining Units of the Affected Member, of which the number of Units owned by such non-transferring Member on the date of the Option Event shall be the numerator, and the total number of Units owned by all of the non-transferring Members on the date of the Option Event shall be the denominator. Each non-transferring Member shall have a right of reallotment such that, if any other non-transferring Member fails to exercise the right to purchase such non-transferring Member’s full pro rata share of the Remaining Units of the Affected Member, then the participating non-transferring Members may exercise an additional right to purchase, on a pro rata basis, the Remaining Units of the Affected Member not previously purchased.

9.3 Notice of Exercise of Option. If the Company and/or the non-transferring Members elect to purchase all of the Units of the Affected Member, then the Company shall give notice of such election, setting forth the number of such Units to be purchased by each party, by giving written notice of such election to the Affected Member and, if applicable, the Affected Member’s receiver or trustee in bankruptcy, the creditor who secured a levy upon the Affected Member’s assets and the Affected Member’s legal representative, spouse or other transferee, as the case may be. Such notice shall be given within thirty (30) days after the Company’s receipt of notice of the Option Event giving rise to the option to purchase in the event that the Company elects to purchase all of the Affected Member’s Units, or within fifteen (15) days after the non-transferring Members have received notice of the Company’s election not to purchase all of such Units in the event that all or a portion of such Units are to be purchased by the non-transferring Members.

9.4 Purchase Price for Units.

(a) Purchase Price. The purchase price to be paid by the Company and/or the Purchasing Members upon the exercise of any option to purchase Units under Section 9.3 (the “Purchase Price”) shall be the fair market value of the Units.

(b) Fair Market Value. The Affected Member or the legal representative of an Affected Member or Deceased Member or Deceased Spouse, as one party, and the Company, as another party, shall attempt to agree upon the fair market value of the Units. If such parties are unable to agree upon the fair market value of the Units within thirty (30) days following the notice of the exercise of the option pursuant to Section 9.3, then the value per Unit of the Units shall be determined by an independent appraiser experienced in appraising closely held businesses selected by the mutual agreement of such parties. If such parties are unable to agree upon a mutually acceptable appraiser within forty-five (45) days following the notice of exercise of the option pursuant to Section 9.3, then the fair market value shall be determined by the Company’s independent certified public accountant. In performing such valuation, the appraiser or accountant, as the case may be, shall consider such methods of valuation as are customary and appropriate in the discretion of such appraiser or accountant.

(c) Binding Effect. The value determined pursuant to this Section 9.4 shall be binding on the parties to this Agreement, their legal representatives and their successors in interest for purposes of purchases and sales made pursuant to Section 9.3.

9.5 Payment of Purchase Price.

(a) Form of Payment. The Company and/or the Purchasing Members shall execute and deliver a negotiable promissory note (the “Note(s)”) representing the purchase price of that portion of the Units of the Affected Member or Deceased Member or Deceased Spouse to be purchased by him, her or it no later than thirty (30) days following (i) the giving of notice pursuant to Section 9.3 containing the election of the Company and/or the Purchasing Members to purchase the Units of the Affected Member; (ii) the appointment of a legal representative for a Deceased Member or Deceased Spouse; or (iii) if applicable, receipt of the decision of the appraiser or independent certified public accountant as to the value of the Units of the Affected Member or Deceased Member or Deceased Spouse under Section 9.4, whichever is later.

(b) Terms of Note(s). The Note(s) shall be fully amortized over a period of not more than forty-eight (48) months and shall bear interest from the date of delivery at a rate equal to nine percent (9%) per annum or the maximum lawful rate, whichever is less. Anything herein to the contrary notwithstanding, in no event shall the interest rate exceed the maximum rate permitted by law. Principal and interest on the Note(s) shall be payable in equal quarterly installments commencing three (3) months after the Option Event date or ten (10) days after the date specified in Section 9.5(a) for delivery of the Note(s), whichever occurs later, and ending no later than forty-eight (48) months after the Option Event date, provided that the Note(s) shall be subject to prepayment, in whole or in part, without penalty, at any time after the calendar year of the sale of the Units of the Affected Member or Deceased Member or Deceased Spouse. All prepaid sums shall be applied against the installments thereafter falling due in inverse order of their maturity or against all the remaining installments equally, at the option of the payee. The Note(s) shall provide that, in any case of default, at the election of the holder the entire sum of principal and interest shall immediately be due and payable and that the maker shall pay reasonable attorneys’ fees to the holder in the event that suit is commenced because of default. Any promissory note executed by the Company and/or the Purchasing Members pursuant to this Section 9.5 shall be secured by a pledge of the Units so purchased. The pledgeholder shall be such person as the parties shall mutually agree upon, and the pledge agreement shall contain such other terms and provisions as may be customary and reasonable. As long as no default occurs in payment on the Note(s), the purchasers (other than the Company) shall be entitled to vote the Units (provided that the Units are Class A Units); however, Distributable Cash shall be paid to the holder of the Note(s) as a prepayment of principal. The Company and/or the Purchasing Members shall expressly waive demand, notice of default and notice of sale and shall consent to public or private sale of the Units in the event of default, in mass or in lots at the option of the pledgeholder, and the holder of the Note(s) shall have the right to purchase at the sale.

9.6 Agreement to Transfer. Each Member agrees that, upon receipt of the Note(s) in connection with the purchase of such Member’s Units pursuant to Sections 9.3 and 9.5, such Member or such Member’s legal representative shall execute and deliver all documents that are required to transfer the Units to the Company and/or the Purchasing Members. If such Member or such Member’s legal representative refuses to do so, then the Company nevertheless shall enter the transfer on its Member records and hold such consideration available for the Member or such Member’s legal representative, and thereafter all voting rights of such Units shall be exercised by the designated transferees of such Units under this Agreement.

10. ADMISSION OF NEW MEMBERS

New Members may be admitted from time to time by the Manager in its discretion.

11. REFERENCE TO A MEMBER

Wherever the context requires, reference in this Agreement to a Member shall include an Assignee who does not become a Substituted Member wherever such reference relates solely to an economic interest in the Company.

12. BOOKS AND RECORDS

12.1 Records. The Company shall keep at its principal office, or such other place as shall be designated by the Manager, the following documents:

(a) A current list of the full name and last known business, residence or mailing address of each Member and Assignee set forth in alphabetical order, together with the number of Units held by each Member or Assignee;

(b) The full name and last known business, residence or mailing address of the Manager;

(c) A copy of the Certificate of Formation and all amendments thereto, and executed copies of all powers of attorney (if any) pursuant to which the Certificate of Formation or any amendment thereto was executed;

(d) Copies of the Company’s federal, state and local income tax returns for the six (6) most recent years;

(e) Copies of this Agreement and all amendments to this Agreement, together with all powers of attorney (if any) pursuant to which this Agreement or any amendment to this Agreement was executed;

(f) Copies of the financial statements of the Company (if any) for the six (6) most recent fiscal years; and

(g) Books and records of the Company as they relate to the internal affairs of the Company for at least the current and past four (4) years.

12.2 Inspection. Upon the request of a Member in writing and with the stated purpose of the request reasonably related to such Member’s interest as a Member of the Company, the Company shall promptly make available for inspection by the requesting Member the information required to be maintained by Section 12.1 to the extent reasonably related to the purpose of that inspection.

12.3 Provision of Reports. Within ninety (90) days of the end of the fiscal year, the Company shall supply all other information necessary to enable each Member to prepare such Member’s federal and state income tax returns and such other information as such Member may reasonably request for the purpose of enabling such Member to comply with all reporting requirements imposed by any statute, rule, regulation or otherwise by any governmental agency or authority.

13. DISSOLUTION AND TERMINATION OF THE COMPANY

13.1 Events Causing Dissolution. Notwithstanding any provision of the Act, the Company shall be dissolved and its affairs shall be wound up only upon the earliest to occur of the following events:

(a) The approval of the Manager and the unanimous consent of the Members; or

(b) Entry of a decree of judicial dissolution under the Act.

13.2 Certificate of Cancellation. As soon as possible following the occurrence of any of the events specified in Section 13.1, the Manager shall execute a certificate of cancellation in such form as shall be prescribed by the Delaware Secretary of State and file such certificate as required by the Act.

13.3 Distribution Upon Dissolution. Upon a dissolution event described in Section 13.1, the Manager shall take full account of the Company’s assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining their fair value, or, if the assets cannot be sold, they shall be valued and distributed in kind, and shall apply and distribute the proceeds or assets in the following order:

(a) To the payment of creditors of the Company;

(b) To the creation of reserves that the Manager deems reasonably necessary for contingent or unforeseen liabilities or obligations of the Company;

and

(d) To the Members with positive Capital Accounts in accordance with the ratio of their Capital Account balances (which Capital Account balances are intended to reflect the priority to distributions in Section 4.4(a)(i)).

14. INDEMNIFICATION

14.1 General. The Company, its receiver or its trustee shall indemnify, defend and save harmless the Manager, the Members and their successors (“Indemnitees”) from any liability, loss or damage incurred by any Indemnitee by reason of any act performed or omitted to be performed by any Indemnitee in connection with the business of the Company, including costs and attorneys’ fees and amounts expended in the settlement of claims of liability, loss or damage; provided that, if the liability, loss or claim arises out of any action or inaction of an Indemnitee: (a) such Indemnitee must have determined, in good faith, that such Indemnitee’s course of conduct was in the best interests of the Company; and (b) the action or inaction did not constitute fraud, deceit, breach of fiduciary duty, gross negligence, reckless or intentional misconduct, willful malfeasance or willful violation of a law by such Indemnitee; and provided further that the indemnification shall be recoverable only from the assets of the Company and not any assets of the Manager or the Members. The Company may, however, purchase and pay for insurance, including extended coverage liability and casualty and worker’s compensation, as would be customary for any person engaging in a similar business, and name the Indemnitees as additional or primary insured parties.

14.2 Advancement of Expenses. The Company shall advance all expenses incurred by an Indemnitee in connection with the investigation, defense, settlement or appeal of any civil or criminal action or proceeding referenced in Section 14.1. The Indemnitee shall repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that such Indemnitee is not entitled to be indemnified by the Company as authorized hereby. The advances to be made hereunder shall be paid by the Company to the Indemnitee within ten (10) days following delivery of a written request therefor by the Indemnitee to the Company.

15. REPRESENTATION AND WARRANTIES OF MEMBERS. Each Member hereby represents, warrants and covenants to the Company that, as of the effective date hereof:

15.1 Investment Representation. Such Member has acquired or is acquiring such Member’s Units in good faith for such Member’s own personal account, for investment purposes only and not with a view to or for the distribution, resale, subdivision, fractionalization or disposition thereof, and such Member has no present intention of selling or otherwise distributing such Units. Such Member is or will be the sole party in interest in such Member’s Units and as such is or will be vested with all legal and equitable rights in such Units.

15.2 Sophistication of the Member. Such Member either has a pre-existing personal or business relationship with the Company or any of its Members or, by reason of such Member’s business or financial experience or the business or financial experience of such Member’s professional advisers, who are unaffiliated with and not compensated by the Company, directly or indirectly, has the capacity to protect such Member’s own interests in connection with this investment. Such Member is able to bear the economic risk of an investment in such Member’s Units and can afford to sustain a total loss on such investment. The nature and amount of such Member’s investment in such Units is consistent with such Member’s investment objectives, abilities and resources. Such Member is an “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended.

15.3 No Public Market. Such Member understands that there is no public market for such Member’s Units and that there is no assurance that there will be such a market in the future. Such Member has been advised that such Member’s Units have not been registered under the Securities Act of 1933, as amended, and that such Units must be held indefinitely unless they are subsequently registered under the Securities Act of 1933, as amended, or an exemption from such registration is available, and such Member understands that the Company is under no obligation to register such Units or to comply with any exemption from such registration requirement. In addition, such Member understands that the transferability of such Member’s Units are and will be further restricted by this Agreement, which, among other things, requires that any sale or assignment of such Member’s Units will be subject to certain terms and conditions. Thus, such Member realizes that such Member cannot expect to be able to liquidate such Member’s investment in the Company readily, or at all, in the case of an emergency.

15.4 Speculative Investment. Such Member recognizes that an investment in the Company is speculative in nature and involves a high degree of risk, and such Member has carefully considered the risk factors involved. These factors include, without limitation, the fact that the business of the Company is in the formative stages and that the Company’s initial capitalization may be insufficient to satisfy the Company’s working capital requirements.

16. SPECIAL POWER OF ATTORNEY

16.1 In General. Each Member hereby irrevocably makes, constitutes and appoints the Manager, with full power of substitution, the true and lawful representative and attorney in fact of, and in the name, place and stead of, such Member, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish:

(a) One or more amendments to this Agreement that have been approved in accordance with Section 7; and

(b) The Certificate of Formation and any amendment thereof required because this Agreement is amended, including an amendment to effect any change in the membership of the Company.

16.2 Acknowledgment. Each Member is aware that the terms of this Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Company without such Member’s consent. If an amendment of the Certificate of Formation or this Agreement or any action by or with respect to the Company is taken by the Manager in the manner contemplated by this Agreement, then each Member hereby agrees that, notwithstanding any objection that such Member may assert with respect to such action, the Manager is authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner that may be necessary or appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Member is fully aware that the Manager will rely on the effectiveness of this special power-of-attorney with a view to the orderly administration of the affairs of the Company. This power-of-attorney is a special power-of-attorney and is coupled with an interest in favor of the Manager and as such (a) is and will be irrevocable and will continue in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power-of-attorney, regardless of whether the Company or the Manager have had notice of such death or incapacity, and (b) will survive the delivery of an assignment by a Member of the whole or any portion of such Member’s interest in the Company, except that where the assignee of such interest has been approved by the Manager for admission to the Company as a Substituted Member in accordance with Section 8.3(a)(iii), this power-of-attorney given by the assignor will survive the delivery of such assignment for the sole purpose of enabling the Manager to execute, acknowledge and file any instrument necessary to effect such substitution.

17. MISCELLANEOUS

17.1 Counterparts. This Agreement may be executed in several counterparts, and such counterparts so executed shall constitute one agreement, binding on all of the Members, notwithstanding that all of the Members are not signatory to the original or the same counterpart.

17.2 Facsimile or Other Electronic Transmission. The confirmed facsimile or other electronic transmission (including email) by any party hereto of a signed copy of the signature page of this Agreement to each other party hereto or such party’s agent shall constitute the delivery of this Agreement.

17.3 Binding on Successors. This Agreement shall be binding on and shall inure to the benefit of the successors and permitted assigns of the Members.

17.4 Severability. If any sentence, paragraph, clause or combination of the same in this Agreement is held by a court of competent jurisdiction to be unenforceable in any jurisdiction, then such sentence, paragraph, clause or combination shall be unenforceable in the jurisdiction where it is so held invalid, and the remainder of this Agreement shall remain binding on the parties hereto in such jurisdiction as if such unenforceable provision had not been contained herein. The enforceability of such sentence, paragraph, clause or combination of the same in this Agreement otherwise shall be unaffected and shall remain enforceable in all other jurisdictions.

17.5 Notices. Unless otherwise specifically provided in this Agreement, all notices and demands required to be given hereunder shall be deemed to be duly given at the time of delivery if such notice or demand is personally delivered, or forty-eight (48) hours after mailing if such notice or demand is deposited with the United States Postal Service, postage prepaid, for mailing via certified mail, return receipt requested, to the Manager and to the Members at the address maintained by the Company for such person or at any other address that such person specifies in writing.

17.6 Headings and Captions. The headings and captions appearing at the beginning of each Section of this Agreement are included herein for the convenience of reference only, do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect any term or provision of this Agreement or its interpretation. This Agreement shall be enforced and construed as if no headings or captions appeared herein.

17.7 Interpretation. All references in this Agreement to “Sections” refer to the corresponding Sections of this Agreement unless otherwise expressly specified. All words used in this Agreement will be construed to be of such gender or number as the context requires. Unless otherwise expressly provided herein, the word “including” or “includes” wherever it appears in this Agreement does not limit the preceding words or terms and shall be interpreted to mean “including, without limitation” and “includes, without limitation” respectively, and the word “or” is used in this Agreement in the inclusive sense. All references in this Agreement to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules and amendments thereto.

17.8 Gender. Whenever required by the context, the masculine gender shall include the feminine and neuter genders, and vice versa.

17.9 Choice of Law. This Agreement shall be construed under the laws of the State of Delaware.

17.10 Entire Agreement. This Agreement contains the entire understanding among the Members and supersedes all prior written or oral agreements among them respecting the subject matter contained herein. There are no representations, agreements, arrangements or understandings, oral or written, among the Members relating to the subject matter of this Agreement that are not fully expressed herein.

17.11 Waiver. No waiver of any breach or default of this Agreement by any party hereto shall be considered to be a waiver of any other breach or default of this Agreement.

17.12 Further Assurances. Each party hereto agrees to perform all further acts and to execute and deliver all further documents that may be reasonably necessary to carry out the provisions of this Agreement.

17.13 Mediation. If any dispute arises (a) out of or relating to this Agreement or any alleged breach thereof or (b) with respect to any of the transactions or events contemplated by this Agreement (each, a “Dispute”), then the party desiring to resolve such Dispute shall deliver a written notice describing such Dispute with reasonable specificity to the other parties (the “Dispute Notice”). If any party delivers a Dispute Notice pursuant to this Section 17.13, then the parties involved in the Dispute shall meet at least twice within the fifteen (15) business day period commencing with the date of the Dispute Notice and in good faith shall attempt to resolve such Dispute. Except as provided herein, no civil action with respect to any dispute, claim or controversy arising out of or relating to this Agreement may be commenced until the matter has been submitted to Judicial Arbitration & Mediation Services, Inc. (“JAMS”) for mediation. Either party may commence mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested. The parties will cooperate with JAMS and with one another in selecting a mediator from JAMS and in scheduling the mediation proceedings. The parties covenant that they will participate in the mediation in good faith and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator and JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any litigation or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable will not be rendered inadmissible or non-discoverable as a result of its use in the mediation. Either party may seek equitable relief before the mediation to preserve the status quo pending the completion of that process. Except for such an action to obtain equitable relief, neither party may commence a civil action with respect to the matters submitted to mediation until after the completion of the initial mediation session or forty-five (45) days after the date of filing the written request for mediation, whichever occurs first. Mediation may continue after the commencement of a civil action if the parties so desire. The provisions of this Section 17.13 may be enforced by any court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys’ fees, to be paid by the party against whom enforcement is ordered.

17.14 Confidentiality. Each of the Members acknowledges and agrees that the information, observations and data obtained by such Member or its Affiliates while such Member is a Member (including all information, observations and data obtained before the effective date of this Agreement concerning the business or affairs of the Company) (collectively, “Confidential Information”) is the exclusive property of the Company. Each Member shall treat and hold as confidential all of the Confidential Information and refrain from using any Confidential Information, unless and to the extent that the aforementioned matters: (a) become generally known to and available for use by the public other than as a result of such Member’s or such Member’s Affiliates’ acts or omissions or (b) are required to be disclosed by judicial process or law. Such Member and its Affiliates shall promptly deliver to the Company at any time the Company may request all lists, memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies of such items) relating to the Confidential Information or the business of the Company that such Member or its Affiliates may then possess or have under his, her or its control.

17.15 Attorneys’ Fees. In the event that a dispute arises with respect to this Agreement, the party prevailing in such dispute shall be entitled to recover all expenses, including reasonable attorneys’ fees and expenses, incurred in ascertaining such party’s rights, in preparing to enforce or in enforcing such party’s rights under this Agreement, whether or not it was necessary for such party to institute suit.

17.16 Legal Counsel. The Company has selected Wilson & Oskam, LLP (“W&O”) as special legal counsel to the Company in connection with the formation and initial organization of the Company, the preparation of this Agreement and related matters. W&O also may be legal counsel to any Member, the Manager or any Affiliate of a Member or the Manager. The Manager may execute on behalf of the Company and the Members any consent to the representation of the Company that W&O may request pursuant to the California Rules of Professional Conduct or similar rules in any other jurisdiction (the “Rules”). Each Member acknowledges that W&O does not represent any Member in the absence of a clear and explicit written agreement to such effect between such Member and W&O and that, in the absence of any such agreement, W&O shall owe no duties directly to a Member. Notwithstanding any adversity that may develop, if any dispute or controversy arises between any Member and the Company, or between any Member or the Company, on the one hand, and the Manager (or an Affiliate of the Manager) that W&O represents, on the other hand, then each Member agrees that W&O may represent either the Company or the Manager (or the Manager’s Affiliate), or both, in any such dispute or controversy to the extent permitted by the Rules, and each Member hereby consents to such representation.

EACH MEMBER FURTHER ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT SUCH MEMBER HAS BEEN ADVISED TO CONSULT WITH SUCH MEMBER’S OWN SEPARATE AND INDEPENDENT LEGAL COUNSEL REGARDING THIS AGREEMENT AND HAS DONE SO TO THE EXTENT THAT SUCH MEMBER CONSIDERS NECESSARY OR HAS WAIVED SUCH MEMBER’S RIGHT TO DO SO.

W&O has no attorney-client relationship with any Member or any trustee or other legal representative of any Member, and no attorney-client relationship with any Member or any trustee or other legal representative of any Member shall exist or be deemed to exist as a result of W&O’s representation of the Company. W&O has not been engaged to protect or represent the interests of any Member vis-à-vis the Company or any Affiliate in connection with the preparation of this Agreement. The Members acknowledge that, as to their respective interests inter se, and as to their respective individual circumstances, they have been advised by W&O to seek independent legal counsel as to all matters related to the Company and this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first written above.

“Member”:

VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation

By:

____________________________

Matt Nicosia,
President

“Manager”:

VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation

	By:	____________________________ Matt Nicosia, President

	Address:
	252 Sunpac
	Henderson, NV 89011

[SIGNATURE PAGE TO LIMITED LIABILITY COMPANY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first written above.

“Members”:

_________________________

Signature

_________________________

Print Name

Address:

_________________________

[SIGNATURE PAGE TO LIMITED LIABILITY COMPANY AGREEMENT]

CONSENT OF SPOUSE OF [NAME]

I, the undersigned, am the spouse of____________________ . I acknowledge that I have read the foregoing Limited Liability Company Agreement of VivaVentures UTS I, LLC (the “Agreement”) and that I know the contents of the Agreement. I am aware that by the Agreement’s provisions my spouse agrees, among other things, to the imposition of certain restrictions on the transfer of my spouse’s Units (the “Units”) in VivaVentures UTS I, LLC, a Delaware limited liability company, including my community property interest therein (if any), which rights and restrictions may survive my spouse’s death. I hereby consent to such rights and restrictions, approve of the provisions of the Agreement and agree that I will bequeath any interest that I may have in the Units, including my community property interest therein (if any), or permit the Units to be purchased, in a manner consistent with the provisions of the Agreement. I direct that any residuary clause in my Will shall not be deemed to apply to my community property interest (if any) in the Units except to the extent consistent with the provisions of the Agreement. I further agree that, in the event of a dissolution of the marriage between my spouse and me, in connection with which I secure or am awarded all or any portion of the Units or any interest therein through property settlement agreement or otherwise, I shall receive and hold such Units or interest therein subject to all of the provisions and restrictions contained in the Agreement.

Date: _____________, 2015	____________________________
	Signature


	____________________________
	Print Name

EXHIBIT A

VIVAVENTURES UTS I, LLC

As of September 24, 2015

Member	Capital Contribution	Class A Units	Percentage
			Interest


VVMCI	$1,000 in cash	1,000	100%

Member	Capital Contribution	Class B Units	Percentage
			Interest

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

		______ Class B Units	____%

Totals			100.0%

Exhibit 10.17

RESTATED

WORKING INTEREST

AGREEMENT BY AND

BETWEEN

VIVAVENTURES ENERGY GROUP, INC.

AND

VIVAVENTURES UTS I, LLC

Effective as of November 2, 2015

Dated as of August 31, 2020

RESTATED WORKING

INTEREST AGREEMENT

THIS RESTATED WORKING INTEREST AGREEMENT (this “Agreement”) is dated as of August 31, 2020, and effective as of November 2, 2015 by and between VIVAVENTURES ENERGY GROUP, INC., a Nevada corporation (the “Company”), and VIVAVENTURES UTS I, LLC, a Delaware limited liability company (“UTS1”).

W I T N E S S E T H:

WHEREAS, starting in October 2015, the Company, and/or its parent company Vivakor, Inc., was granted surface rights and/or extraction rights to various parcels of land and tons of oil sands in Utah and other locations, including, but not limited to, a parcel of land in Utah that is estimated to contain 44.7 million barrels of oil in the oil sands (together, the “Property”);

WHEREAS, UTS1 raised investor funds for the primary purposes of paying for the Company’s operation and production costs associated with the oil extraction business and production from the Selected Material on the Property and building the Extraction Machine, in exchange for receiving a share of the production revenue received by the Company from its operations and processing of Selected Material on the Property;

WHEREAS, on or about November 2, 2015, the Company and UTS1 entered into what was called a “Royalty Agreement” (the “Original Agreement”);

WHEREAS, the parties working arrangement under the Original Agreement, each investor’s funds that were invested in UTS1 were invested in the Company, with 80% of each investor’s funds used for the Company’s operations associated with the oil extraction business and production of Selected Material on the Property (the “Working Interest Right”) and 20% as an investment in exchange for a portion of the proceeds received from production of the Selected Material on the Property (“Revenue Participation Right”);

WHEREAS, the parties desire to enter into this Agreement to replace the Original Agreement in order to ensure the agreement between the parties accurately reflects the actual working relationship between the parties and how investor’s funds have been invested and used;

WHEREAS, as noted in the Original Agreement, the Company requires additional funding to manufacture and operate its proprietary equipment to extract oil from tar sands, and UTS1 desires to provide the Company with such additional funding; and

WHEREAS, UTS1 desires to purchase the Working Interest Right and the Revenue Participation Right from the Company in exchange for providing the additional funding, and the Company desires to sell the Working Interest Right and the Revenue Participation Right to UTS1 in exchange for receiving the additional funding, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which hereby are acknowledged, the Company and UTS1 hereby agree as follows:

Article I. SALE, TRANSFER, ASSIGNMENT AND CONVEYANCE OF THE WORKING INTEREST RIGHT AND REVENUE PARTICIPATION RIGHT

Section 1.01 Sale, Transfer, Assignment and Conveyance. Upon the terms and subject to the conditions of this Agreement, for the purchase price set forth below, the Company agrees to sell, transfer, assign and convey to UTS1, and UTS1 agrees to purchase, acquire and accept from the Company, the Working Interest Right and the Revenue Participation Right, free and clear of all Liens (except those Liens created in favor of UTS1 pursuant to this Agreement and Permitted Liens). UTS1, as a holder of a Working Interest Right agrees to join and pay its share of the cost of any operations on Selected Materials from the Property with any other holders of a working interest right, up to 80% of the proceeds received (the portion of the Purchase Price associated with the Working Interest Right). In exchange, the Company agrees to promptly pay and discharge all expenses incurred in the development and operation of Selected Material on the Property pursuant to this Agreement and shall charge UTS1 its respective proportionate share of such expenses, up to 80% of the proceeds received (the portion of the Purchase Price associated with the Working Interest Right).

Section 1.02 Purchase Price. At the Closing, the purchase price to be paid to the Company for the sale, transfer, assignment and conveyance of the Working Interest Right and the Revenue Participation Right to UTS1 is Five Million Dollars ($5,000,000.00) in cash (the “Purchase Price”), with 80% of any invested funds being used to acquire the Working Interest Right and 20% being used to acquire the Revenue Participation Right. The Purchase Price may be paid in installments over a reasonable period of time as determined by the Company in its discretion.

Section 1.03 No Assumed Obligations, Etc. Notwithstanding any provision in this Agreement to the contrary, UTS1 is only agreeing, on the terms and conditions set forth in this Agreement, to purchase, acquire and accept the Working Interest Right and the Revenue Participation Right and is not assuming any liability or obligation of the Company of whatever nature, whether presently in existence or arising or asserted hereafter, except as specifically set forth herein.

Section 1.04 Security Interest. Effective from and after the Closing, the Company hereby grants to UTS1, to secure the payment and performance in full of all of the Company’s obligations under this Agreement, including the payment of past and future Revenue Participation Payments, a continuing security interest in the Collateral, including the Stock Collateral (subject to Section 1.04(b)), wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. The Company represents, warrants and covenants that the security interest granted above shall, subject to Section 1.04(b) and Section 1.04(c), at all times continue to be a perfected security interest in the Collateral, subject only to Permitted Liens. For purposes of this Agreement, the term “proceeds” includes whatever is receivable or received when Collateral or proceeds is sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment, including return premiums, with respect to any insurance relating thereto.

(a) Effective immediately upon the Company’s payment to UTS1 of the first Revenue Participation Payment owed and payable under this Agreement, UTS1’s Lien in all of the Stock Collateral shall be released without any further action of any party. At the Company’s expense, UTS1 shall, and UTS1 hereby authorizes the Company (or any agent of the Company) to, prepare and file, at any time within three (3) Business Days following the Company’s payment to UTS1 of the first Revenue Participation Payment owed and payable under this Agreement, all documents and take all other actions reasonably requested by the Company to evidence the release of UTS1’s Lien on the Stock Collateral.

(b) Effective immediately upon payment in full of the Maximum Revenue Participation, UTS1’s Lien in all of the Collateral shall be released without any further action of any party. At the Company’s expense, UTS1 shall, and UTS1 hereby authorizes the Company (or any agent of the Company) to, prepare and file, at any time within three (3) Business Days following the payment of the Maximum Revenue Participation, all documents and take all other actions reasonably requested by the Company to evidence the release of UTS1’s Lien on the Collateral.

(c) Following the Company’s failure to make full and prompt payment of any portion of the Revenue Participation Right when due, but in all events subject to Section 5.02(c) (such failure, a “Payment Breach”), and at any time thereafter during the continuation of such Payment Breach, UTS1 shall be entitled to exercise all rights and remedies available under this Agreement, including the right to demand immediate payment of all portions of the Revenue Participation Right then due, and UTS1 thereupon may exercise any other right, power or remedy granted to UTS1 or otherwise permitted to UTS1 by law, either by suit in equity or by action at law, or both, including, without limitation, UTS1’s rights as a secured party under the Uniform Commercial Code with respect to the Collateral, but in all events subject to Section 1.04(b).

(d) The Company hereby authorizes UTS1 to file financing statements or take any other action required to perfect UTS1’s security interest in the Collateral, at any time during which this Agreement remains in effect, with notice to the Company, in all appropriate jurisdictions to perfect or protect UTS1’s interest or rights hereunder, including a notice that any disposition of the Collateral, except to the extent permitted by the terms of this Agreement, by the Company, or any other Person, shall be deemed to violate the rights of UTS1 under the Uniform Commercial Code. The Company further agrees to procure, deliver or execute and deliver to UTS1, from time to time, all additional security agreements, instruments and documents, each in form and substance reasonably satisfactory to UTS1, to perfect or protect UTS1’s security interest in the Collateral in accordance with this Section 1.04.

Article II. CLOSING

Section 2.01 Closing. The Closing shall take place on the first Business Day immediately following the date on which the conditions set forth in Article IV (Conditions to Closing) have been satisfied, or at such other place, time and date as the parties hereto may mutually agree. Subject to the provisions of Article VIII (Termination), failure to consummate the sale, transfer, assignment and conveyance of the Working Interest Right or Revenue Participation Right as provided in this Article II on the date determined pursuant to this Section 2.01 shall not result in a termination of this Agreement and shall not relieve either party hereto of any of such party’s respective obligations hereunder.

Section 2.02 Payment of Purchase Price. At the Closing, UTS1 shall deliver (or cause to be delivered) payment of the Purchase Price to the Company by wire transfer of immediately available funds to one or more accounts specified by the Company; provided, however, that, pursuant to Section 1.02 (Purchase Price), the Company in its discretion may agree to accept an installment of the Purchase Price at the Closing in such amount as the Company may determine, in which event, at the Closing, UTS1 shall deliver (or cause to be delivered) payment of such installment in such amount to the Company by wire transfer of immediately available funds to one or more accounts specified by the Company.

Article III. REPRESENTATIONS AND WARRANTIES

Section 3.01 Company’s Representations and Warranties. The Company represents and warrants to UTS1 that, as of the effective date hereof:

(a) Existence; Good Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada. The Company is duly licensed or qualified to do business and is in corporate good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified and in corporate good standing has not and would not reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the Company, the Working Interest Right or the Revenue Participation Right.

(b) Authorization. The Company has all requisite corporate power and authority to execute, deliver and perform the Company’s obligations under this Agreement. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Company.

(c) Enforceability. This Agreement has been duly executed and delivered by an authorized officer of the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy laws or by general principles of equity (whether considered in a proceeding in equity or at law).

(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) contravene or conflict with the Articles of Incorporation or Bylaws of the Company, (ii) contravene or conflict with or constitute a material default under any law binding on or applicable to the Company or (iii) contravene or conflict with or constitute a material default under any material contract or other material agreement or Judgment binding on or applicable to the Company.

(e) Consents. Except for the consents that have been obtained on or before the Closing or filings required by the federal securities laws or stock exchange rules, no consent, approval, license, order, authorization, registration, declaration or filing with or of any Governmental Entity or other Person is required to be done or obtained by the Company in connection with (i) the execution and delivery by the Company of this Agreement, (ii) the performance by the Company of its obligations under this Agreement or (iii) the consummation by the Company of any of the transactions contemplated by this Agreement.

(f) No Litigation. The Company is not a party to, and has not received notice of, any action, suit, investigation or proceeding pending before any Governmental Entity and, to the Knowledge of the Company, no such action, suit, investigation or proceeding has been threatened against the Company that, individually or in the aggregate, would, if determined adversely, reasonably be expected to prevent or adversely affect (i) the ability of the Company to enter into and to perform the Company’s obligations under this Agreement, (ii) the Company’s rights in or to the Extraction Technology or (iii) after the Closing, UTS1’s rights with respect to the Working Interest Right or Revenue Participation Right.

(g) Compliance with Laws. The Company is not in violation of, and to the Knowledge of the Company, the Company is not under investigation with respect to, nor has the Company been threatened to be charged with or given notice of any violation of, any law or Judgment applicable to the Company, which violation would reasonably be expected to adversely affect the Company’s rights in or to the Extraction Technology or, after the Closing, UTS1’s rights with respect to the Working Interest Right or the Revenue Participation Right hereunder.

(h) Title to Working Interest Right and Revenue Participation Right. Upon the Closing, UTS1 will have acquired, subject to the terms and conditions set forth in this Agreement, good and marketable title to the Working Interest Right and Revenue Participation Right, free and clear of all Liens (except those Liens created in favor of UTS1 pursuant to this Agreement and Permitted Liens).

(i) Intellectual Property. To the Knowledge of the Company, the Company is the registered owner of all of the intellectual property rights relating to the Extraction Technology. The Company has not received any written notice that there is any, and, to the Knowledge of the Company, there is no, Person challenging inventorship or ownership of, the rights of the Company in and to, or the patentability, validity or enforceability of, the Extraction Technology, or asserting that the development, manufacture, importation, sale, offer for sale or use of a product incorporating the Extraction Technology infringes or will infringe such Person’s patents or other intellectual property rights.

Section 3.02 UTS1’s Representations and Warranties. UTS1 represents and warrants to the Company that, as of the effective date hereof:

(a) Existence; Good Standing. UTS1 is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.

(b) Authorization. UTS1 has the requisite limited liability company right, power and authority to execute, deliver and perform UTS1’s obligations under this Agreement. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary action on the part of UTS1.

(c) Enforceability. This Agreement has been duly executed and delivered by an authorized person of the Manager of UTS1 and constitutes the valid and binding obligation of UTS1, enforceable against UTS1 in accordance with its terms, except as may be limited by applicable bankruptcy laws or by general principles of equity (whether considered in a proceeding in equity or at law).

(d) No Conflicts. The execution, delivery and performance by UTS1 of this Agreement do not and will not (i) contravene or conflict with the organizational documents of UTS1, (ii) contravene or conflict with or constitute a default under any material provision of any law binding on or applicable to UTS1 or (iii) contravene or conflict with or constitute a default under any material contract or other material agreement or Judgment binding on or applicable to UTS1.

(e) Consents. No consent, approval, license, order, authorization, registration, declaration or filing with or of any Governmental Entity or other Person is required to be done or obtained by UTS1 in connection with (i) the execution and delivery by UTS1 of this Agreement, (ii) the performance by UTS1 of UTS1’s obligations under this Agreement, other than the filing of financing statement(s) in accordance with Section 1.04 (Security Interest), or (iii) the consummation by UTS1 of any of the transactions contemplated by this Agreement.

(f) No Litigation. There is no action, suit, investigation or proceeding pending or, to the knowledge of UTS1, threatened before any Governmental Entity to which UTS1 is a party that would, if determined adversely, reasonably be expected to prevent or materially and adversely affect the ability of UTS1 to perform UTS1’s obligations under this Agreement.

Article IV. CONDITIONS TO CLOSING

Section 4.01 Conditions to UTS1’s Obligations. The obligations of UTS1 to consummate the transactions contemplated hereunder on the Closing Date are subject to the satisfaction or waiver, at or before the Closing Date, of each of the following conditions precedent:

(a) The Company and UTS1 shall have executed all documents, instruments and agreements required under this Agreement to consummate the transactions contemplated by this Agreement, and all such documents, instruments and agreements shall be in full force and effect.

(b) The representations and warranties of the Company contained in Section 3.01 (Company’s Representations and Warranties) shall be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except to the extent that any such representation or warranty expressly speaks as of a particular date, in which case it shall be true and correct in all material respects as of such date; provided that, to the extent that any such representation or warranty is qualified by the term “material,” such representation or warranty (as so written, including the term “material”) shall be true and correct in all respects as of the Closing Date or such other date, as applicable.

(c) No event or events shall have occurred, or be reasonably likely to occur, that, individually or in the aggregate, have had or would reasonably be expected to result in (or, with the giving of notice, the passage of time or otherwise, would result in) a material adverse effect on the business, operations or financial condition of the Company, including upon the Extraction Technology, the Working Interest Right, or the Revenue Participation Right.

(d) There shall not have been issued and be in effect any Judgment of any Governmental Entity enjoining, preventing or restricting the consummation of the transactions contemplated by this Agreement.

(e) There shall not have been instituted or be pending any action or proceeding by any Governmental Entity or any other Person (i) challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the transactions contemplated hereby, (ii) seeking to obtain material damages in connection with the transactions contemplated hereby or (iii) seeking to restrain or prohibit UTS1’s purchase of the Working Interest Right or the Revenue Participation Right.

Section 4.02 Conditions to the Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereunder on the Closing Date are subject to the satisfaction or waiver, at or before the Closing Date, of each of the following conditions precedent:

(a) UTS1 shall have performed and complied in all material respects with all agreements, covenants, obligations and conditions required to be performed and complied with by UTS1 under this Agreement at or before the Closing Date.

(b) The representations and warranties of UTS1 contained in Section 3.02 (UTS1’s Representations and Warranties) shall be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except to the extent that any such representation or warranty expressly speaks as of a particular date, in which case it shall be true and correct in all material respects as of such date; provided that, to the extent that any such representation or warranty is qualified by the term “material,” such representation or warranty (as so written, including the term “material”) shall be true and correct in all respects as of the Closing Date or such other date, as applicable.

(c) There shall not have been issued and be in effect any Judgment of any Governmental Entity enjoining, preventing or restricting the consummation of the transactions contemplated by this Agreement.

(d) There shall not have been instituted or be pending any action or proceeding by any Governmental Entity or any other Person (i) challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the transactions contemplated hereby, (ii) seeking to obtain material damages in connection with the transactions contemplated hereby or (iii) seeking to restrain or prohibit UTS1’s purchase of the Working Interest Right or the Revenue Participation Right.

Article V. COVENANTS

Section 5.01 Guaranteed Production; Maximum Revenue Participation. The Company agrees to process tar sands or other material containing oil or hydrocarbons such that the Company will obtain not less than One Million Five Hundred Thousand (1,500,000) barrels of oil from the use of the Extraction Machine using the Extraction Technology (the “Guaranteed Production”). Upon the processing and sale of One Million Five Hundred Thousand (1,500,000) barrels of oil (i.e., the Guaranteed Production) and payment of the Revenue Participation Right thereon (the “Maximum Revenue Participation”), the Revenue Participation Right shall terminate, and UTS1 shall not be entitled to any further payment under this Agreement. The Company shall, in its sole discretion, select the source or location of the tar sands or other material to be processed using the Extraction Machine (the “Selected Material”). The Company makes no representation or warranty with respect to the timing of the first Revenue Participation Payment to be made by the Company hereunder. For sake of clarity, UTSI is only entitled to Revenue Participation Payments that are derived from the Extraction Machine and not from any other machines the Company may have in production.

Section 5.02 Property Expense Reports; Working Interest Right Reports.

(a) The Company shall pay all expenses related to the building of the Extraction Machine, production of Selected Material, and using the Extraction Machine with funds provided by working interest holders, including, but not limited to, UTS1. For UTS1, such expense payments shall not exceed 80% of the proceeds received (the portion of the Purchase Price associated with the Working Interest Right).

(b) Upon written request by UTS1, the Company shall deliver a written report setting forth in reasonable detail the expenses paid by the Company associated with the oil extraction business and production from the Selected Material on the Property and building the Extraction Machine, including all expenses paid with UTS1’s Purchase Price funds (each a “Working Interest Expense Report”).

Section 5.03. Revenue Participation Payments; Revenue Participation Reports.

(b) The Company shall make all payments required to be made by the Company to UTS1 pursuant to this Agreement in U.S. Dollars by wire transfer of immediately available funds, without set-off, reduction or deduction or withholding for or on account of any Taxes, to the bank account designated in writing from time to time by UTS1.

(c) If the Company fails, or expects to fail, to satisfy any of the Company’s payment obligations owed to UTS1 pursuant to this Agreement when such obligations are due, then the Company shall send a notice to UTS1 (a “Late Payment Notice”) disclosing such failure or expected failure. If the Company sends a Late Payment Notice to UTS1, then the Company’s failure to satisfy any of the Company’s payment obligations during a calendar year will not be considered a breach of this Agreement, and UTS1 hereby agrees not to exercise UTS1’s remedies under this Agreement, until the Company has been delinquent in the Company’s payment obligations for an aggregate of three (3) consecutive calendar quarters in such calendar year. Notwithstanding the foregoing, a late fee of two percent (2%) over the Prime Rate will accrue on all unpaid amounts from the date such obligations were due. The imposition and payment of a late fee will not constitute a waiver of UTS1’s rights with respect to such payment default.

(d) Before or simultaneously with each payment of the Revenue Participation Payments, the Company shall deliver a written report setting forth in reasonable detail the calculation of the Revenue Participation Payments payable to UTS1 for such calendar quarter and the calculation of all deductions from Gross Revenue to determine Net Revenue and Revenue Participation Payments due to UTS1 (the “Revenue Participation Report”).

Section 5.04 Inspections and Audits of the Company. Following the Closing, upon reasonable prior written notice and during normal business hours, UTS1 may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Company to be made of the Company’s books of account for the two (2) calendar years before the audit, no more frequently than once per calendar year, for the purpose of determining the correctness of Revenue Participation Payments made under this Agreement and the use of the funds invested for the Working Interest Right. All of the expenses of any inspection or audit requested by UTS1 hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne by (i) UTS1, if the independent public accounting firm determines that Revenue Participation Payments previously paid were incorrect by an amount less than or equal to five percent (5%) of the Revenue Participation Payments actually paid or (ii) the Company, if the independent public accounting firm determines that Revenue Participation Payments previously paid were incorrect by an amount greater than five percent (5%) of the Revenue Participation Payments actually paid. Any such accounting firm shall not disclose the Company’s or its licensees’ confidential information to UTS1, except to the extent such disclosure is either necessary to determine the correctness of Revenue Participation Payments or otherwise would be included in a Revenue Participation Report. All information obtained by UTS1 as a result of any such inspection or audit shall be Confidential Information subject to Article VII (Confidentiality).

Section 5.05 Further Assurances. After the Closing, the Company and UTS1 agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to give effect to the transactions contemplated by this Agreement.

Article VI. INDEMNIFICATION

Section 6.01 General Indemnity. From and after the Closing:

(a) the Company hereby agrees to indemnify, defend and hold harmless UTS1 and its Affiliates and its and their directors, managers, members, officers, agents and employees (the “UTS1 Indemnified Parties”) from, against and in respect of all Losses suffered or incurred by UTS1 Indemnified Parties to the extent arising out of or resulting from (i) any breach of any of the representations or warranties (in each case, when made) of the Company in this Agreement and (ii) any breach of any of the covenants or agreements of the Company in this Agreement; and

(b) UTS1 hereby agrees to indemnify, defend and hold harmless the Company and its Affiliates and its and their directors, officers, agents and employees (the “Company Indemnified Parties”) from, against and in respect of all Losses suffered or incurred by the Company Indemnified Parties to the extent arising out of or resulting from (i) any breach of any of the representations or warranties (in each case, when made) of UTS1 in this Agreement or (ii) any breach of any of the covenants or agreements of UTS1 in this Agreement.

Section 6.02 Limitations on Liability. No party hereto will be liable for any consequential, punitive, special or incidental damages, and no claim for indemnification will be asserted by any party under this Article VI for any consequential, punitive, special or incidental damages, as a result of any breach of any of the representations or warranties (in each case, when made) of the other party hereto in this Agreement or any breach of any of the covenants or agreements of the other party hereto in this Agreement (including under this Article VI).

Article VII. CONFIDENTIALITY

Section 7.01 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the parties, the parties hereto agree that, for the term of this Agreement and for two (2) years thereafter, each party (the “Non-Disclosing Party”) shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement (which includes the exercise of any rights or the performance of any obligations hereunder) any information furnished to the Non-Disclosing Party (such information, “Confidential Information”) by or on behalf of the other party (the “Disclosing Party”) pursuant to this Agreement except for that portion of such information that:

(a) was already known to the Non-Disclosing Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Non-Disclosing Party;

(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the Non-Disclosing Party in breach of this Agreement;

(d) is independently developed by the Non-Disclosing Party or any of its Affiliates

without the use of the Confidential Information; or

(e) is subsequently disclosed to the Non-Disclosing Party on a non-confidential basis by a Third Party without obligations of confidentiality with respect thereto.

Section 7.02 Authorized Disclosure. Either party may disclose Confidential Information to the extent such disclosure is reasonably necessary in the following situations:

(a) prosecuting or defending litigation;

(b) complying with applicable laws and regulations, including regulations promulgated by securities exchanges;

(d) for regulatory, Tax or customs purposes;

(e) for audit purposes;

(f) disclosure to its Affiliates, directors, managers, trustees, officers, employees and agents only on a need-to-know basis and solely in connection with the performance of this Agreement or oversight of the transactions contemplated hereby, provided that each disclose must be bound by customary obligations of confidentiality and non-use before any such disclosure;

(g) upon the prior written consent of the Disclosing Party; or

(h) disclosure to its investors and other sources of funding, including debt financing, and their respective accountants, financial advisors and other professional representatives, provided that such disclosure shall be made only to the extent customarily required to consummate such investment or financing transaction and that each disclose must be bound by customary obligations of confidentiality and non-use before any such disclosure.

Notwithstanding the foregoing, in the event that the Non-Disclosing Party is required to make a disclosure of the Disclosing Party’s Confidential Information pursuant to Sections 7.02(a), (b), (c) or (d), the Non-Disclosing Party shall, except where impracticable, give reasonable advance notice to the Disclosing Party of such disclosure and use reasonable efforts to secure confidential treatment of such information. In any event, UTS1 shall not file any patent application based on or using the Confidential Information of the Company provided hereunder or otherwise assert any ownership claim with respect to, or claim any right to make, use or sell products incorporating, the Extraction Technology.

Article VIII. TERMINATION

Section 8.01 Grounds for Termination. This Agreement may be terminated:

(a) by mutual written agreement of UTS1 and the Company; or

(b) by UTS1 if there is a Payment Breach; provided, however, that the Company shall have thirty (30) calendar days to cure any Payment Breach after the date on which UTS1 shall have first provided written notice to the Company of such Payment Breach.

Section 8.02 Automatic Termination. Unless earlier terminated as provided in Section 8.01, after the Closing, this Agreement shall continue in full force and effect until payment in full of the Maximum Revenue Participation, upon which this Agreement shall terminate automatically.

Section 8.03 Survival. Notwithstanding anything to the contrary in this Article VIII, the following provisions shall survive termination of this Agreement: Article VI (Indemnification); Article VII (Confidentiality) and Article IX (Miscellaneous). Termination of this Agreement shall not relieve any party of liability in respect of breaches under this Agreement by any party on or before termination of this Agreement.

Article IX. MISCELLANEOUS

Section 9.01 Definitions. The following terms, as used herein, shall have the following meanings:

“Affiliate” means, with respect to any particular Person, any other Person directly or indirectly controlling, controlled by or under common control with such particular Person.

“Agreement” is defined in the preamble.

“Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in Las Vegas, Nevada are permitted or required by applicable law or regulation to remain closed.

“Closing” means the closing of the sale, transfer, assignment and conveyance of the Revenue Participation Right hereunder.

“Closing Date” means the date on which the Closing occurs pursuant to Section 2.01.

“Collateral” means (i) the Product Collateral and (ii) until such time as the first Revenue Participation Payment owed and payable under this Agreement is made by the Company to UTS1, the Stock Collateral.

“Company” is defined in the preamble.

“Company Indemnified Parties” is defined in Section 6.01(b).

“Confidential Information” is defined in Section 7.01.

“Disclosing Party” is defined in Section 7.01.

“Extraction Machine” means that that certain petroleum extraction machine built using funds invested by UTS1 investors.

“Extraction Technology” means that certain petroleum extraction technology (also known as hydrocarbon extraction technology) suitable to extract petroleum (or hydrocarbons) from tar sands and other sand based ore bodies, and all related concepts and conceptualizations thereof, and all related proprietary information and intellectual property rights related thereto, all of which are proprietary to and owned exclusively by the Company.

“Governmental Entity” means any: (i) nation, principality, republic, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or other entity and any court, arbitrator or other tribunal); (iv) multi-national organization or body; or (v) individual, body or other entity exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

“Gross Revenue” means the actual cash receipts of the Company from the sale of Product extracted by the Company from the Selected Material using the Extraction Machine, which Product has been delivered to and accepted by the purchaser. “Gross Revenue,” as determined pursuant to this Agreement, may materially differ from the calculation of revenue determined by Generally Accepted Accounting Principles and the Company’s revenue recognition policies used in the preparation of its financial statements.

“Guaranteed Production” is defined in Section 5.01.

“Judgment” means any judgment, order, writ, injunction, citation, award or decree of any nature.

“Knowledge of the Company” means the actual knowledge of Matt Nicosia, Douglas Carpenter (PhD) and/or Tyler Nelson, after due inquiry. (Matt Nicosia is the President and CEO of the Company; Douglas Carpenter (PhD) is the Chief Technology Officer of the Company; and Tyler Nelson is the Chief Financial Officer and Secretary of the Company.)

“Land-Related Expenses” means all costs incurred by the Company arising from or relating to the ownership, lease, control or use of the land from which the Selected Material is extracted (or is to be extracted), including but not limited to the purchase price, lease or rental charges, existing royalties, profit sharing and similar obligations, governmental fees and charges, transfer fees, property taxes and license fees.

“Late Payment Notice” is defined in Section 5.02(c).

“Lien” means any mortgage, lien, pledge, participation interest, charge, adverse claim, security interest, encumbrance or restriction of any kind, including any restriction on use, transfer or exercise of any other attribute of ownership of any kind.

“Loss” means any and all Judgments, damages, losses, claims, costs, liabilities and expenses, including reasonable fees and out-of-pocket expenses of counsel; provided, however, that “Loss” shall not include any consequential, punitive, special or incidental damages.

“Maximum Revenue Participation” is defined in Section 5.01.

“Net Revenue” means Gross Revenue less all Land-Related Expenses.

“Non-Disclosing Party” is defined in Section 7.01.

“Payment Breach” is defined in Section 1.04(d).

“Payment Stream” means all Revenue Participation Payments payable in respect of Net Revenue.

“Permitted Liens” means any and all Liens related to or otherwise based on or created by or pursuant to Land-Related Expenses.

“Person” means any individual, firm, corporation, company, partnership, limited liability company, trust, joint venture, association, estate, trust, Governmental Entity or other entity, enterprise, association or organization.

“Prime Rate” means the prime rate published by The Wall Street Journal, from time to time, as the prime rate.

“Product” means any hydrocarbon product extracted by the Company from the Selected Material using the Extraction Machine, whether crude or refined oil, diesel, gasoline, naphtha, fuel oil, heavy oil or any other hydrocarbon byproduct.

“Product Collateral” means any and all Product that has not been sold by the Company and therefore has not been converted into Gross Revenue or Net Revenue.

“Purchase Price” is defined in Section 1.02.

“Revenue Participation Payment” means, for each quarter, an amount payable to UTS1 equal to the Net Revenue during such quarter multiplied by the Revenue Participation Rate.

“Revenue Participation Rate” means (i) if the sales price of Product sold by the Company is in excess of Fifty Dollars ($50.00) per barrel, then twenty-five percent (25%) of the Net Revenue from the sale of such Product, and (ii) if the sales price of Product sold by the Company is equal to or less than Fifty Dollars ($50.00) per barrel, then fifteen percent (15%) of the Net Revenue from the sale of such Product.

“Revenue Participation Report” is defined in Section 5.02(d).

“Revenue Participation Right” means, collectively, all of UTS1’s rights to receive the Payment Stream.

“Selected Material” is defined in Section 5.01.

“Stock Collateral” means twenty million (20,000,000) shares of Common Stock, par value $.001 per share, of Vivakor, Inc., a Nevada corporation.

“Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, abandoned property, value added, alternative or add- on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not.

“Third Party” means any Person that is not the Company or an Affiliate of the Company and not UTS1 or an Affiliate of UTS1.

“Uniform Commercial Code” means the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of Nevada; provided that, to the extent that the Uniform Commercial Code is used to define any term herein and such term is defined differently in different Articles or Divisions of the Uniform Commercial Code, the definition of such term contained in Article or Division 9 shall govern; provided further that, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, UTS1’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of Nevada, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions relating to such provisions.

“UTS1” is defined in the preamble.

“UTS1 Indemnified Parties” is defined in Section 6.01(a).

“Working Interest Right” means UST1’s right and obligations related to the Company’s operations and production of the Property, which is being acquired with 80% of each UST1 investor’s funds.

Section 9.02 Certain Interpretations. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement:

(a) “either” and “or” are not exclusive and “include,” “includes” and “including” are not limiting and shall be deemed to be followed by the words “without limitation”;

(b) “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”;

(c) “hereof,” “hereto,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement;

(d) references to a Person are also to its permitted successors and assigns;

(e) definitions are applicable to the singular as well as the plural forms of such terms;

(f) references to an “Article” or “Section” refer to an Article or Section of this Agreement;

(g) references to “$” or otherwise to Dollar amounts refer to the lawful currency of the United States; and

(h) references to a law include any amendment or modification to such law and rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the effective date of this Agreement.

Section 9.03 Headings. The descriptive headings of the several Articles and Sections of this Agreement are for convenience only, do not constitute a part of this Agreement and shall not control or affect, in any way, the meaning or interpretation of this Agreement.

Section 9.04 Notices. All notices and other communications under this Agreement shall be in writing and shall be by courier service or personal delivery to the following addresses, or to such other addresses as shall be designated from time to time by a party hereto in accordance with this Section 9.04:

If to the Company, to it at:

VivaVentures Energy Group, Inc.

252 Sunpac

Henderson, NV 89011

Attention: Chief Executive Officer

with a copy to:

Law Offices of Craig V. Butler

300 Spectrum Center Drive, Ste 300

Irvine, CA 92618

Attention: Craig V. Butler, Esq.

If to UTS1, to it at:

VivaVentures UTS I, LLC

c/o VivaVentures Management Company, Inc., Manager

252 Sunpac

Henderson, NV 89011

Attention: Chief Executive Officer

All notices and communications under this Agreement shall be deemed to have been duly given (i) when delivered by hand, if personally delivered, or (ii) one (1) Business Day following sending within the United States by overnight delivery via commercial one-day overnight courier service.

Section 9.05 Expenses. Except as otherwise provided herein, all fees, costs and expenses (including legal, accounting and banking fees) incurred in connection with the preparation, negotiation, execution and delivery of this Agreement and to consummate the transactions contemplated hereby shall be paid by the party hereto incurring such fees, costs and expenses.

Section 9.06 Assignment. This Agreement shall be binding on, inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns. The Company may not assign this Agreement without UTS1’s prior written consent, except in connection with a sale of all or substantially all of the assets of the Company, and provided that the successor entity expressly assumes in writing to UTS1 all of the Company’s rights and obligations under this Agreement. UTS1 may not assign this Agreement without the Company’s prior written consent (which the Company may withhold in its discretion), provided that any such assignee agrees in writing to the Company all of UTS1’s rights and obligations under this Agreement; provided further, however, that UTS1 shall not have any right to assign this Agreement at any time before the release of UTS1’s Lien in all of the Stock Collateral pursuant to Section 1.04(b). Any purported assignment in violation of this Section 9.06 shall be null and void.

Section 9.07 Amendment and Waiver.

(a) This Agreement may be amended, modified or supplemented only in a writing signed by each of the parties hereto. Any provision of this Agreement may be waived only in a writing signed by the party hereto granting such waiver.

(b) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. No course of dealing between the parties hereto shall be effective to amend, modify, supplement or waive any provision of this Agreement.

Section 9.08 Entire Agreement. This Agreement constitutes the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes all other understandings and negotiations with respect thereto.

Section 9.09 No Third Party Beneficiaries. This Agreement is for the sole benefit of the Company and UTS1 and their permitted successors and assigns, and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such permitted successors and assigns, any legal or equitable rights hereunder.

Section 9.10 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

Section 9.11 JURISDICTION; VENUE.

(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS RESPECTIVE PROPERTY AND ASSETS, TO THE EXCLUSIVE JURISDICTION OF ANY NEVADA STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN LAS VEGAS, NEVADA, AND ANY APPELLATE COURT THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, AND UTS1 AND THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEVADA COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. UTS1 AND THE COMPANY HEREBY AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAW. EACH OF UTS1 AND THE COMPANY HEREBY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF SUCH NEVADA STATE AND FEDERAL COURTS. UTS1 AND THE COMPANY AGREE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT PROCESS MAY BE SERVED ON UTS1 OR THE COMPANY IN THE SAME MANNER THAT NOTICES MAY BE GIVEN PURSUANT TO SECTION 9.04 HEREOF.

(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEVADA STATE OR FEDERAL COURT. EACH OF UTS1 AND THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

Section 9.12 Severability. If any term or provision of this Agreement is for any reason held to be invalid, illegal or unenforceable in any situation in any jurisdiction, then, to the extent that the economic and legal substance of the transactions contemplated hereby is not affected in a manner that is materially adverse to either party hereto, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect, and the enforceability and validity of the offending term or provision shall not be affected in any other situation or jurisdiction.

Section 9.13 Specific Performance. Each of the parties hereto acknowledges and agrees that the other party would be damaged irreparably in the event that any of the provisions of this Agreement is not performed in accordance with its specific terms or otherwise is breached or violated. Accordingly, each of the parties hereto agrees that, without posting bond or other undertaking, the other party will be entitled to an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action, suit or other proceeding instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter in addition to any other remedy to which it may be entitled, at law or in equity. Each party hereto further agrees that, in the event of any action for specific performance in respect of such breach or violation, such party will not assert the defense that a remedy at law would be adequate.

Section 9.14 Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, facsimile or other similar means of electronic transmission, including “PDF,” shall be considered original executed counterparts, provided receipt of such counterparts is confirmed.

Section 9.15 Relationship of Parties. The relationship between UTS1 and the Company is solely that of purchaser and company, and neither UTS1 nor the Company has any fiduciary or other special relationship with the other party or any of its Affiliates. This Agreement is not a partnership or similar agreement, and nothing contained herein shall be deemed to constitute UTS1 and the Company as a partnership, an association, a joint venture or any other kind of entity or legal form for any purpose, including any Tax purpose. UTS1 and the Company agree that they shall not take any inconsistent position with respect to such treatment in a filing with any Governmental Entity.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective representatives thereunto duly authorized effective as of the effective date first written above.

The “Company”:

VIVAVENTURES ENERGY GROUP, INC.,

a Nevada corporation

By: /s/ Matt Nicosia

Matt Nicosia

President and CEO

“UTS1”:

VIVAVENTURES UTS I, LLC,

a Delaware limited liability company

By: VIVAVENTURES MANAGEMENT COMPANY, INC.,

a Nevada corporation, its Manager

By: /s/ Matt Nicosia

Matt Nicosia

President and CEO

[SIGNATURE PAGE TO RESTATED WORKING INTEREST AGREEMENT]

Exhibit 10.18

AMENDMENT NO. 1 TO

RESTATED WORKING INTEREST AGREEMENT

This Amendment No. 1 is made this 31st day of August, 2020, by and between VIVAVENTURES ENERGY GROUP, INC., a Nevada corporation (the “Company”), and VIVAVENTURES UTS I, LLC, a Delaware limited liability company (“UTS1”), to amend the terms of that certain Restated Working Interest Agreement dated August 31, 2020 and entered into by the same parties (the “Agreement”). This Amendment No. 1 is effective as of June 30, 2018, the date the parties orally agreed to, and began operating under, the amendments to the Agreement set forth herein. In the event the terms of the Agreement and this Amendment No. 1 conflict, the terms of this Amendment No. 1 control.

WHEREAS, the Company approached UTS1 with the prospect of amending the Agreement to change how UTS1’s Revenue Participation Payments would be calculated under the Agreement;

WHEREAS, in response to the Company’s request, the management of UTS1 notified the holders of its Class A Units (voting) and its Class B Units (non-voting) regarding the proposed amendments, with UTS1’s management and UTS1’s Class A Unit holders approving the suggested amendments as of June 30, 2018, and the holders of UTS1’s Class B Units that responded to UTS1’s request for comment on the suggested amendments indicated they were in favor of the proposed amendments (even though they do not have voting rights);

WHEREAS, the Parties wish to enter into this Amendment No. 1 amend the Revenue Participation Payments under the Agreement as stated herein, with an effective date of June 30, 2018;

In consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Article 5 of the Agreement is hereby amended and restated in its entirety as follows:

Article V. COVENANTS

“Section 5.01 Production and Revenue Participation. The Company plans to process tar sands or other material containing oil or hydrocarbons using the Extraction Machine, which uses the Extraction Technology. The Company shall, in its sole discretion, select the Selected Material. The Company makes no representation or warranty with respect to the timing of the first Revenue Participation Payment to be made by the Company hereunder. As set forth herein, UTSI is entitled to Revenue Participation Payments that are derived from the Extraction Machine and not from any other machines the Company may have in production.

Section 5.02 Revenue Participation Payments; Revenue Participation Reports.

(a) After the Company has commenced processing the Selected Material using the Extraction Machine hereunder and following the Company’s first sale of Product hereunder and thereafter, the Company shall commence paying and thereafter continue to pay to UTS1 the Revenue Participation Payments for each calendar quarter promptly, but in any event no later than forty-five (45) calendar days after the end of such calendar quarter. The Revenue Participation Right will terminate on the date that is the twentieth (20^th) anniversary from the Extraction Machine is placed into production. Likewise, the Revenue Participation Payments will terminate once the final payment is made based on the termination of the Revenue Participation Right.

(d) Before or simultaneously with each payment of the Revenue Participation Payments, the Company shall deliver a written report setting forth in reasonable detail the calculation of the Revenue Participation Payments payable to UTS1 for such calendar quarter and the calculation of Gross Revenue used to determine the Revenue Participation Payments due to UTS1 (the “Revenue Participation Report”).

Section 5.03 Inspections and Audits of the Company. Following the Closing, upon reasonable prior written notice and during normal business hours, UTS1 may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Company to be made of the Company’s books of account for the two (2) calendar years before the audit, no more frequently than once per calendar year, for the purpose of determining the correctness of Revenue Participation Payments made under this Agreement and the use of the funds invested for the Working Interest Right. All of the expenses of any inspection or audit requested by UTS1 hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne by UTS1, if the independent public accounting firm determines that Revenue Participation Payments previously paid were incorrect by an amount less than or equal to five percent (5%) of the Revenue Participation Payments actually paid or (ii) the Company, if the independent public accounting firm determines that Revenue Participation Payments previously paid were incorrect by an amount greater than five percent (5%) of the Revenue Participation Payments actually paid. Any such accounting firm shall not disclose the Company’s or its licensees’ confidential information to UTS1, except to the extent such disclosure is either necessary to determine the correctness of Revenue Participation Payments or otherwise would be included in a Revenue Participation Report. All information obtained by UTS1 as a result of any such inspection or audit shall be Confidential Information subject to Article VII (Confidentiality).

Section 5.04 Further Assurances. After the Closing, the Company and UTS1 agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to give effect to the transactions contemplated by this Agreement.”

Section 9.01 of the Agreement is hereby amended as follows:

“Guaranteed Production” is defined in Section 5.01.”

“Payment Stream” means all Revenue Participation Payments payable in respect of Gross Revenue.”

“Revenue Participation Payment” means, for each quarter, an amount payable to UTS1 equal to the Net Revenue during such quarter multiplied by the Revenue Participation Rate.

“Revenue Participation Rate” means twenty-five percent (25%) of the Gross Revenue from the sale of Product allocated to the Company under any agreements with third parties generated from the Selected Material.”

“Selected Material” means the source or location of the tar sands or other material to be processed using the Extraction Machine, which shall be determined by the Company in its sole discretion.”

IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers or other authorized signatory, have executed this Amendment No. 1 as of the date first above written. This Amendment No. 1 may be signed in counterparts and facsimile signatures are treated as original signatures.

The “Company”:

VIVAVENTURES ENERGY GROUP, INC.,

a Nevada corporation

By: /s/ Matt Nicosia

Matt Nicosia

President and CEO

“UTS1”:

VIVAVENTURES UTS I, LLC,

a Delaware limited liability company

By: VIVAVENTURES MANAGEMENT COMPANY, INC.,

a Nevada corporation, its Manager

By: /s/ Matt Nicosia

Matt Nicosia

President and CEO

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO RESTATED WORKING INTEREST AGREEMENT]

Exhibit 10.19

LIMITED LIABILITY COMPANY AGREEMENT

VIVAVENTURES ROYALTY II, LLC,

a Nevada limited liability company

This Limited Liability Company Agreement (this “Agreement”) is effective as of November 6, 2017 by and among VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation (“VVMCI”), as a Member (as defined below herein) and as the Manager (as defined below herein), and such other Persons who have been or may be admitted to the Company from time to time as Members (as defined below herein) and set forth in Exhibit A hereto (all of the foregoing (including VVMCI) together, collectively, the “Members” and each of them, individually, a “Member”). Certain capitalized terms used herein have the meanings set forth in Section 2.

1. ORGANIZATION

1.1 General. VivaVentures Royalty II, LLC (the “Company”) was formed as a Nevada limited liability company by the execution and filing of the Certificate of Formation with the Nevada Secretary of State in accordance with the Act, and the rights and liabilities of the Members shall be as provided in the Act, as may be modified in this Agreement. In the event of a conflict between the provisions of the Act and the provisions of this Agreement, the provisions of this Agreement shall prevail unless the Act specifically provides that a Limited Liability Company Agreement may not change the provision in question.

1.2 Business Purpose. The Company may engage in any business in which a Nevada limited liability company may engage, except that the Company shall not engage in the trust company business or in the business of banking or insurance; provided, however, that, as of the effective date of this Agreement, the Company’s sole and exclusive purpose shall be to enter into a Royalty Agreement (the “VV Energy Group Working Interest Agreement”) with VIVAVENTURES ENERGY GROUP, INC., a Nevada corporation (“VV Energy Group”), and be entitled to collect payments from VV Energy Group pursuant to and in accordance with the VV Energy Group Royalty Agreement.

1.3 Name and Address of Company. The business of the Company shall be conducted under the name “VivaVentures Royalty II, LLC”. The principal executive office of the Company shall be at the address determined from time to time by the Manager.

1.4 Term. The term of this Agreement shall be perpetual unless sooner terminated as provided in this Agreement.

2. DEFINITIONS

For purposes of this Agreement, the terms defined herein below shall have the following meanings unless the context clearly requires a different interpretation:

2.1 “Act” means the Nevada Limited Liability Company Act, as codified in the Nevada Code Annotated, Title 6, Sections 18-101 et seq., as the same may be amended from time to time, and including any successor statute of similar import.

(a) Credit to such Capital Account amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.

2.4 “Agreement” means this Limited Liability Company Agreement of the Company, as the same may be amended from time to time.

2.5 “Assignee” means a Person who has acquired Units in the Company from a Member or an Assignee but who is not a Substituted Member.

2.7 “Capital Contributions” means the total of all cash contributions and property contributions to the capital of the Company by the Members as provided in Section 3.2.

2.8 “Certificate of Formation” means the Certificate of Formation of the Company filed with the Nevada Secretary of State, as the same may be amended from time to time.

2.11 “Code” means the Internal Revenue Code of 1986, as amended to date, or corresponding provisions of subsequent superseding revenue laws.

2.12 “Company” means the limited liability company created pursuant to the Certificate of Formation as governed by this Agreement.

2.17 “Distributions” means any cash (or property to the extent applicable) distributed to the Members or Assignees arising from their ownership of Units.

2.18 “Economic Risk of Loss” means the “economic risk of loss” within the meaning of Section 1.752-2 of the Treasury Regulations.

2.19 “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Manager;

(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Manager, as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); and (iv) the grant of an interest in the Company as consideration for the provision of services to or for the benefit of the Company; provided, however, that the adjustments pursuant to the preceding clauses (i), (ii) and (iv) shall be made only if the Manager reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(c) The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the Manager; and

(d) The Gross Asset Value of Company assets shall be increased (or decreased) to reflect adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extent that the Manager determines that an adjustment pursuant to subsection (b) above is necessary or appropriate in connection with a transaction that otherwise would result in an adjustment pursuant to this subsection (d).

2.20 “Indemnitees” has the meaning given to such term in Section 14.1.

2.22 “Manager” means the Person appointed or elected as the Manager pursuant to Section 5.

2.23 “Member” means any Person admitted to the Company as a Member or Substituted Member and who has not ceased to be a Member.

2.24 “Member Nonrecourse Debt” means liabilities of the Company treated as “partner nonrecourse debt” under Section 1.704-2(b)(4) of the Treasury Regulations.

income or loss of the Company shall be computed, inter alia, by:

(a) including as Net Income or Net Loss, as appropriate, any adjustment to the Gross Asset Value of any Company asset pursuant to subsection (b) or (c) of Section 2.18 defining “Gross Asset Value”;

(b) including as income or deductions, as appropriate, any tax-exempt income and related expenses that are neither properly included in the computation of taxable income nor capitalized for federal income tax purposes;

(c) including as a deduction when paid or incurred (depending on the Company’s method of accounting) all amounts used to organize the Company or to promote the sale of (or to sell) Units, except that amounts for which an election is properly made by the Company under Section 709(b) of the Code shall be accounted for as provided therein;

(d) including as a deduction or loss losses incurred by the Company in connection with the sale or exchange of property, notwithstanding that such losses may be disallowed to the Company for federal income tax purposes under the related party rules of Code Sections 267(a)(1) or 707(b) or otherwise;

(e) calculating the gain or loss on disposition of Company assets and the depreciation, amortization or other cost recovery deductions, if any, with respect to Company assets by reference to their Gross Asset Value rather than their adjusted tax basis;

(f) excluding any gain or income specially allocated under Sections 4.4(e), 4.5 and 4.6; and

(g) excluding Nonrecourse Deductions.