Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Business Overview

Vivakor, Inc. ("Vivakor" or the "Company") is an integrated provider of midstream services and environmental solutions within the oil and gas industry. The Company operates through three reportable segments: transportation and logistics, terminaling and storage services, and supply and trading. These segments support the movement, storage, and marketing of crude oil and related hydrocarbon products across key producing regions, including the Permian Basin and mid-continent regions.

The Company's transportation and logistics segment includes trucking and pipeline transportation operations for, including the Omega Gathering Pipeline in Blaine County, Oklahoma, which serves as a direct connect to the Plains STACK Pipeline and provides access to the Cushing, Oklahoma storage hub. The terminaling and storage segment includes crude oil storage and blending facilities in Colorado City, Texas and Delhi, Louisiana. The supply and trading segment purchases, aggregates, markets, and resells crude oil, condensate, natural gas liquids, and related hydrocarbon products.

The Company is also developing an environmental services business through the planned deployment of Remediation Processing Centers ("RPCs"), are designed to recover hydrocarbons from oil contaminated soils and related waste streams. The deployment plan begins with the construction of a RPC in Harris County, Texas, currently scheduled for the third quarter of 2026.

On October 1, 2024, the Company acquired certain entities (the "Endeavor Entities"), expanding its midstream operations. During 2025, the Company completed the sale of certain non-core assets acquired in this transaction as part of a strategic review. On July 30, 2025, the Company sold certain non-core business units of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, both subsidiaries included with the Endeavor Entities, in order to streamline operations and focus on core midstream transportation, terminaling, and environmental processing activities.

During the first quarter of 2026 and subsequent thereto, the Company continued to pursue additional financing transactions and capital restructuring initiatives intended to support working capital requirements, reduce indebtedness, and support ongoing operations and strategic growth initiatives.

Recent Developments

March 2026 Reverse Stock Split

On March 24, 2026, the Company effected a 1-for-200 reverse stock split of its common stock pursuant to a Certificate of Amendment to the Company's Amended and Restated Articles of Incorporation following shareholder approval obtained at the Company's Special Meeting held on December 22, 2025.

Private Financing Transaction (the "Financing")

Convertible Promissory Notes

The following summary of the Notes does not purport to be complete and is qualified in its entirety by reference to the forms of SPA and Notes filed as exhibits to the registration statement of which this prospectus forms a part.

On May 8, 2026, the Company entered into a Securities Purchase Agreement (the "SPA") with certain institutional investors providing for the issuance of convertible promissory notes (the "Notes") with aggregate gross proceeds to the Company of up to $12.0 million, before fees and expenses, in two closings. The Notes have an aggregate principal amount of $15.0 million, reflecting a $3.0 million original issue discount of 20%.

The initial closing occurred on May 8, 2026, pursuant to which the Company received $6.0 million in gross proceeds. A second closing for an additional $6.0 million remains subject to the effectiveness of the registration statement of which this prospectus forms a part and other customary closing conditions pursuant to the terms of the SPA and the Note.

The Notes are convertible into shares of the Company's Common Stock at a conversion price equal to the greater of $0.37 per share and 80% of the lowest daily volume weighted average price ("VWAP") of the Company's common stock during the five trading days immediately preceding conversion.

Conversions under the Notes are generally subject to a 4.99% beneficial ownership limitation, which may be waived upon notice by the applicable holder. In addition, absent shareholder approval, conversions are limited to the extent necessary to comply with Nasdaq's 19.99% issuance limitation.

The Notes contain customary events of default, including payment and covenant defaults, which may result in acceleration of amounts due under the notes and certain additional default-related remedies, including an increase in the outstanding principal amount upon the occurrence of certain events of default.

The Company agreed to register for resale shares issuable upon conversion of the Notes, and this prospectus forms part of the related registration statement.

The Company intends to use proceeds from the Financing for working capital, debt reduction, and general corporate purposes.

RBW Capital Partners LLC, a division of Dawson James Securities, Inc., acted as placement agent in connection with the Financing.

Standby Equity Purchase Agreement

The following summary of the Standby Equity Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the form of the Standby Equity Purchase Agreement filed as an exhibit to the registration statement of which this prospectus forms a part.

On May 8, 2026, the Company entered into a standby equity purchase agreement (the "SEPA") with an institutional investor (the "SEPA Investor") providing for the potential purchase by the SEPA Investor of up to $100 million of the Company's common stock over a 36-month period, subject to the terms and conditions of the SEPA.

Under the SEPA, the Company may, at its discretion, direct the SEPA Investor to purchase shares of common stock from time to time, subject to specified volume limitations, pricing formulas, and beneficial ownership limitations set forth in the agreement. Shares issued under the SEPA will generally be purchased at a discount to prevailing market prices.

The Company controls the timing and amount of any sales under the SEPA, subject to the terms and limitations contained in the agreement. Actual sales under the SEPA will depend on a variety of factors, including market conditions, trading prices of the Company's common stock, and the Company's capital needs.

The Company is required to file a separate registration statement covering shares issuable under the SEPA before any sales may occur under the agreement.

Reclassifications

Certain reclassifications have been made to prior years' amounts to conform to the 2025 presentation, including adjustments related to the purchase price allocation of accrued interest and principal note payable amounts to conform to the 2025 presentation.

Change in Segment Reporting

Beginning in the third quarter of 2025, the Company revised its segment reporting structure to better reflect how the chief operating decision maker evaluates performance and allocates resources across the business. The Company now reports three operating and reportable segments: transportation and logistics, terminaling and storage services, and supply and trading. Revenue generated from supply and trading were previously reported under Terminaling and Storage and Transportation and Logistics in the first two quarters of 2025.

The Company's chief operating decision maker evaluates segment performance primarily based on segment gross profit. Prior-period segment information has been recast, where applicable, to conform to the current presentation.

Concurrent with this change, we no longer report "Corporate and Other" as a separate category, as these activities do not represent an operating segment and are not separately reviewed by our chief operating decision maker. Corporate expenses, including executive and shared services personnel, stock-based compensation, professional fees, and other overhead costs, are now allocated to the operating segments or reflected in consolidated results, as appropriate.

Results of Consolidated Operations for the three months ended March 31, 2026 and 2025

Revenue

For the three months ended March 31, 2026 and 2025, revenues were $19,458,110 and $37,340,291, respectively, representing a decrease of $17,882,181, or 47.89%. The decrease in revenue was primarily attributable to the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC.

Excluding the impact of the 2025 divestitures, the Company's earnings and cash flows from its midstream business operations are primarily affected by market conditions, commodity price fluctuations, and crude oil production levels within the Company's operating regions, which influence throughput volumes, transportation activity, storage utilization, and trading margins.

Cost of Revenue

For the three months ended March 31, 2026 and 2025, cost of revenues was $13,734,880 and $32,581,857, respectively, representing a decrease of $18,846,977, or 57.85%.

Cost of revenues primarily consists of costs associated with the Company's transportation and logistics operations, terminaling and storage services, and crude oil supply and trading activities, and generally fluctuates based on operating activity levels, throughput volumes, and commodity trading volumes.

Gross Profit

For the three months ended March 31, 2026 and 2025, gross profit was $5,723,230 and $4,758,434, respectively, representing an increase of $964,796, or 20.28%.

The increase in gross profit was primarily attributable to improved margins within the Company's core midstream operations, supported by fee-based commercial arrangements and take-or-pay contracts with minimum volume commitments. In addition, the Company's supply and trading activities continued to contribute meaningful revenues during the quarter, although these activities generally generate lower margins due to the high-volume nature of the business.

Operating Expenses

For the three months ended March 31, 2026 and 2025, operating expenses were $8,148,496 and $11,200,915, respectively, representing a decrease of $3,052,419, or 27.25%. The decrease in operating expenses was primarily attributable to lower depreciation and amortization expense resulting from the July 2025 divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, as well as changes in estimated useful lives of certain fixed assets during the 2026 period. These decreases were partially offset by increased legal and accounting expenses and the establishment of an allowance for expected credit losses during the 2026 period.

Interest Expense

For the three months ended March 31, 2026 and 2025, total interest expense, including related-party interest expense, was $2,013,411 and $1,184,198, respectively, representing an increase of $829,213, or 234.85%. The increase in interest expense was primarily attributable to refinancing and forbearance arrangements entered into during the period, including the amortization of original issue discounts, deferred financing costs, and default-related fees. Interest expense also increased due to finance lease and debt obligations assumed in connection with the acquisition of the Endeavor Entities on October 1, 2024.

Unrealized Gain (Loss) on Marketable Securities

For the three months ended March 31, 2026 and 2025, the Company recognized an unrealized loss on marketable securities of $11,378 and an unrealized gain of $1,652,754, respectively, representing a decrease of $1,664,132.

The Company's marketable securities are recorded at fair value based on quoted market prices, with unrealized gains and losses recognized in earnings during the applicable reporting period.

Segment Operating Results for the three months ended March 31, 2026 and 2025

Operating Results of our Terminaling and Storage Segment:

		2026				2025				Change ($)				Change (%)
Revenues		$	140,532			$	16,231,043			$	(16,090,511	)			-99.13	%
Revenues - related party			1,732,218				2,037,534				(305,316	)			-14.98	%
Total revenues			1,872,750				18,268,577				(16,395,827	)			-89.75	%
Cost of revenues			195,336				17,232,060				(17,036,724	)			-98.87	%
Gross profit		$	1,677,414			$	1,036,517			$	640,897				61.83	%

Revenues generated by the terminaling and storage segment decreased primarily due to reduced throughput and related service activities during the period. Gross profit increased primarily due to improved operating margins supported by fee-based commercial arrangements and take-or-pay contracts with minimum volume commitments.

Operating Results of our Transportation Logistics Segment:

		2026				2025				Change ($)				Change (%)
Revenues		$	402,728			$	3,287,663			$	(2,884,935	)			-87.75	%
Revenues - related party			3,632,508				2,514,241				1,118,267				100.00	%
Total revenues			4,035,235				5,801,904				(1,766,669	)			-30.45	%
Cost of revenues			-				2,106,371				(9,766,845	)			-100.00	%
Gross profit		$	4,035,235			$	3,695,533			$	339,702				9.19	%

Revenues in the transportation and logistics segment decreased primarily due to reduced service activities and a more concentrated customer base following the July 2025 divestiture of certain non-core operations. Gross profit increased primarily due to improved operating margins supported by fee-based commercial arrangements and take-or-pay contracts with minimum volume commitments.

Operating Results of our Supply and Trading Segment:

		2026				2025				Change ($)				Change (%)
Revenues		$	13,550,125			$	13,269,810			$	280,315				100.00	%
Revenues - related party			-				-				-				0.00	%
Total revenues			13,550,125				13,269,810				280,315				100.00	%
Cost of revenues			13,539,544				13,243,426				296,118				100.00	%
Gross profit		$	10,581			$	26,384			$	(15,803	)			100.00	%

Revenues in the supply and trading segment increased primarily due to higher volumes under the Company's crude oil and condensate purchase and resale activities. Gross profit decreased primarily due to the high-volume, low-margin nature of supply and trading activities, as well as commodity price volatility and market pricing differentials affecting crude oil sales during the period.

Cash Flow

The following table sets forth the primary sources and uses of cash and cash equivalents for the three months ended March 31, 2026 and 2025 as presented below:

		March 31,
		2026				2025
Net cash (used) by operating activities		$	(3,315,302	)		$	(35	)
Net cash provided by investing activities			-				1,482,000
Net cash provided (used) by financing activities			1,294,457				(370,174	)

Liquidity and Capital Resources

Operating Activities

Net cash used in operating activities was approximately $3.3 million for the three months ended March 31, 2026, compared to minimal cash usage during the comparable 2025 period. Operating cash flows during the 2026 period were primarily impacted by the Company's net loss and working capital changes, including increases in accounts receivable, partially offset by non-cash expenses including depreciation and amortization, stock-based compensation, and non-cash interest expense.

During the three months ended March 31, 2026, amounts due under related-party commercial agreements were offset against approximately $1.1 million outstanding under a related-party note payable pursuant to existing offset arrangements between the parties.

As of March 31, 2026, the Company had approximately $5.3 million outstanding under its accounts receivable factoring arrangement with B1 Bank. During the quarter, B1 Bank applied approximately $1.8 million of restricted cash maintained by the Company against amounts outstanding under the facility.

Investing Activities

There were no investing activities during the three months ended March 31, 2026.

During the three months ended March 31, 2025, investing activities primarily consisted of approximately $1.0 million related to the manufacturing of the Company's remediation processing centers ("RPCs"), as well as capital expenditures associated with wash plant facilities and pipeline infrastructure projects, partially offset by approximately $1.5 million of proceeds received from the sale of vehicles and trailers.

Financing Activities

Net cash provided by financing activities was approximately $1.3 million for the three months ended March 31, 2026, primarily attributable to proceeds received from loans and notes payable.

During the three months ended March 31, 2025, financing activities included approximately $6.3 million of proceeds from the issuance of notes payable and other financing arrangements, partially offset by approximately $6.6 million of repayments on notes payable and finance lease liabilities.

Liquidity Outlook

Although the Company had no firm contractual commitments for capital expenditures as of March 31, 2026, management expects to continue investing in the development of its Texas remediation and wash plant facilities as market conditions and available capital permit.

The Company expects to continue funding operations and strategic growth initiatives through a combination of operating cash flows, financing activities, and capital management initiatives. The Company's ability to access additional capital will depend on a variety of factors, including market conditions, operating performance, and capital market availability. Management continues to evaluate opportunities to enhance liquidity and support ongoing operations and development activities.

Contractual Obligations

The Company remains in discussions with Maxus Capital Group, LLC regarding certain finance lease obligations that were subject to a prior forbearance agreement entered into during 2025. As of March 31, 2026, the related finance lease liabilities continue to be classified as current due to the existing payment status and ongoing negotiations with the lessor.

Description		March 31, 2026				December 31, 2025
Principal portion of finance lease obligations		$	8,711,783			$	8,711,784
Accrued interest		$	651,422			$	390,068
Total finance lease liabilities (current)		$	9,363,205			$	9,101,852

Our contractual obligations as of March 31, 2026 for operating lease liabilities are for office warehouse space, land, and truck yards, which leases end in 2026 through 2028. Contractual payments under operating lease obligations as of March 31, 2026 are as follows:

2026		$	226,467
2027		$	181,559
2028		$	56,220
2029			-
Thereafter			-
Total Remaining		$	464,246

Interest Rate and Market Risk

Interest rate risk is the potential for reduced net interest income and other rate-sensitive income resulting from adverse changes in the level of interest rates. We do not have variable interest rate-sensitive income agreements. We do have financing arrangements that were issued on August 1, 2022 as consideration for the business combination and acquisition of SFD and WCCC, in which notes have variable interest rates based on the prime rate, which exposes us to further interest expense if the prime rate increases.

Market Risk - Equity Investments

Market risk is the potential for loss arising from adverse changes in the fair value of fixed-income securities, equity securities, other earning assets, and derivative financial instruments as a result of changes in interest rates or other factors. We own equity securities that are publicly traded. Because the fair value of these securities may fall below the cost at which we acquired them, we are exposed to the possibility of loss. Equity investments are approved, monitored, and evaluated by members of management.

Inflation

Prolonged periods of slow growth, significant inflationary pressures, volatility and disruption in financial markets, could lead to increased costs of doing business. Inflation generally will cause suppliers to increase their rates, and inflation may also increase employee salaries and benefits. 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

Except for revisions to the estimated useful lives of certain property and equipment disclosed in Note X to the condensed consolidated financial statements, there have been no material changes to our critical accounting policies or use of estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on April 15, 2026.