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VIVAKOR, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Q)

Word Relating to Ahead-Trying Statements This Quarterly Report on Type 10-Q consists of numerous forward-looking statements throughout the which means…

By Staff , in Precious Metals , at May 13, 2022


Word Relating to Ahead-Trying Statements

This Quarterly Report on Type 10-Q consists of numerous forward-looking
statements throughout the which means of Part 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Part 21E of the Securities Trade Act
of 1934, as amended, (the “Trade Act”) that replicate administration’s present
views with respect to future occasions and monetary efficiency. These statements
are primarily based upon beliefs of, and data at present accessible to, the Firm’s
administration in addition to estimates and assumptions made by the Firm’s
administration. Readers are cautioned to not place undue reliance on these
forward-looking statements, that are solely predictions and communicate solely as of the
date hereof. When used herein, the phrases “anticipate,” “imagine,” “estimate,”
“anticipate,” “forecast,” “future,” “intend,” “plan,” “predict,” “mission,”
“goal,” “potential,” “will,” “would,” “might,” “ought to,” “proceed” or the
unfavourable of those phrases and comparable expressions as they relate to the Firm or
the Firm’s administration establish forward-looking statements. Such statements
replicate the present view of the Firm with respect to future occasions and are
topic to dangers, uncertainties, assumptions, and different components, together with the
dangers referring to the Firm’s enterprise, business, and the Firm’s operations
and outcomes of operations. Ought to a number of of those dangers or uncertainties
materialize, or ought to the underlying assumptions show incorrect, precise
outcomes might differ considerably from these anticipated, believed, estimated,
anticipated, meant, or deliberate.

Though the Firm believes that the expectations mirrored within the
forward-looking statements are cheap, the Firm can’t assure future
outcomes, ranges of exercise, efficiency, or achievements. Besides as required by
relevant legislation, together with the securities legal guidelines of america, the Firm
doesn’t intend to replace any of the forward-looking statements to adapt these
statements to precise outcomes.

Our monetary statements are ready in accordance with accounting ideas
usually accepted in america (“GAAP”). These accounting ideas
require us to make sure estimates, judgments and assumptions. We imagine that
the estimates, judgments and assumptions upon which we rely are cheap primarily based
upon data accessible to us on the time that these estimates, judgments and
assumptions are made. These estimates, judgments and assumptions can have an effect on the
reported quantities of belongings and liabilities as of the date of the monetary
statements in addition to the reported quantities of revenues and bills throughout the
durations introduced. Our monetary statements could be affected to the extent
there are materials variations between these estimates and precise outcomes. The
following dialogue needs to be learn along with our monetary statements
and notes thereto showing elsewhere on this report. The forward-looking
statements made on this report are primarily based solely on occasions or data as of the
date on which the statements are made on this report. Besides as required by legislation,
we undertake no obligation to replace or revise publicly any forward-looking
statements, whether or not on account of new data, future occasions or in any other case,
after the date on which the statements are made or to replicate the incidence of
unanticipated occasions. You need to learn this report and the paperwork we check with
on this report and have filed as reveals to this report utterly and with the
understanding that our precise future outcomes could also be materially totally different from
what we anticipate.

Though we imagine that the expectations mirrored within the forward-looking
statements are cheap, we can’t assure future outcomes, ranges of
exercise, or efficiency. Readers are urged to fastidiously overview and think about the
numerous disclosures made by us on this report and in our different studies filed
with the Securities and Trade Fee (“SEC”). We undertake no obligation
to replace or revise forward-looking statements to replicate modified assumptions,
the incidence of unanticipated occasions or adjustments sooner or later working
outcomes over time besides as required by legislation. We imagine that our assumptions are
primarily based upon cheap knowledge derived from and recognized about our enterprise and
operations. No assurances are made that precise outcomes of operations or the
outcomes of our future actions is not going to differ materially from our
assumptions.

As used on this Quarterly Report on Type 10-Q and except in any other case indicated,
the phrases “Firm,” “we,” “us,” and “our” check with Vivakor, Inc., its wholly
owned and majority-owned energetic subsidiaries, or joint ventures (collectively,
the “Firm”). Intercompany balances and transactions between consolidated
entities are eradicated. Vivakor has the next wholly and majority-owned
subsidiaries: Vivaventures Administration Firm, Inc., Vivaventures Power Group,
Inc.
(99%), Vivaventures Oil Sands, Inc., Vivasphere, Inc., and Vivakor Center
East, LLC
(49%, consolidated). Vivakor manages and consolidates RPC Design and
Manufacturing LLC
, which features a noncontrolling curiosity funding from
Vivaopportunity Fund, LLC, which can be managed by Vivaventures Administration
Firm, Inc.
Vivakor has frequent officers with and consolidates Viva Wealth Fund
I, LLC
.






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Enterprise Overview



Vivakor, Inc. is a socially accountable operator, acquirer and developer of
clear vitality applied sciences and environmental options, primarily targeted on soil
remediation. We specialize within the remediation of soil and the extraction of
hydrocarbons, corresponding to oil, from properties contaminated by or laden with heavy
crude oil and different hydrocarbon-based substances.

We’re targeted on the remediation of contaminated soil and water ensuing from
both man-made spills or naturally occurring deposits of oil. Our major focus
has been the remediation of oil spills ensuing from the Iraqi invasion of
Kuwait and naturally occurring oil sands deposits within the Uinta basin situated in
Japanese Utah. We plan to increase into different markets, each domestically and
globally, the place we imagine our know-how and companies will present a definite
aggressive benefit over our competitors.


COVID-19


On March 11, 2020, the World Well being Group (“WHO”) declared the COVID-19
outbreak to be a worldwide pandemic. Along with the devastating results on
human life, the pandemic is having a unfavourable ripple impact on the worldwide
economic system, resulting in disruptions and volatility within the international monetary markets.
Most U.S. states and plenty of nations have issued insurance policies meant to cease or
sluggish the additional unfold of the illness.

Our Kuwait operations have been suspended to adjust to the social distancing
measures applied in Kuwait. Our Utah operations have been briefly suspended
from March via Might 2020, however have since resumed in full. Kuwait has allowed
for the Firm to acquire web site personnel visas to recommence operations. These
suspensions have had a unfavourable affect on our enterprise and there might be no
warranty that we are going to not have to droop operations once more sooner or later as a
results of the pandemic.

COVID-19 and the U.S. response to the pandemic are considerably affecting the
economic system. There aren’t any comparable occasions that present steerage as to the impact
the COVID-19 pandemic might have within the long-term, and, in consequence, the final word
impact of the pandemic is extremely unsure and topic to alter. We don’t but
know the total extent of the consequences on the economic system, the markets we serve, our
enterprise, or our operations.

Outcomes of Operations for the Three Months ended March 31, 2022 and 2021


Income


For the three months ended March 31, 2022 and 2021 we realized revenues of none
and $95,000, respectively, representing a lower of $95,000 or 100%. The
lower in income is primarily attributed to the Firm diverting its
assets away from its treasured metals enterprise that was entered into throughout
COVID-19 mandated shutdowns, and again to its major enterprise of producing
and web site preparations for reopening its Remediation Processing Facilities (RPCs)
for remediation and manufacturing. For the three months ended March 31, 2021,
roughly 99% of our revenues have been realized from treasured metallic gross sales from
our marketing strategy of shopping for and promoting treasured metallic commodities on the open
market throughout the COVID-19 pandemic whereas our remediation operations have been shut
down or delayed. These treasured metals having been acquired for instant
resale, with the Firm appearing as middleman and by no means holding a listing
of treasured metals.


Price of Income


Our price of revenues consisted primarily of prices related to promoting our
treasured metals on the open market and treasured metallic commodity dealer charges.

For the three months ended March 31, 2022 and 2021 prices of income have been none
and $91,920, respectively, representing a lower of $91,920 or 100%. The
lower in the price of income straight pertains to prices related to
promoting our treasured metals on the open market and treasured metallic commodity
dealer charges. Because the lower in income is primarily attributed to the Firm
diverting its assets away from its treasured metals enterprise in 2022 that was
entered into throughout COVID-19 mandated shutdowns, and again to its major
enterprise of producing an web site preparations for reopening its RPCs for
remediation and manufacturing, the Firm didn’t understand prices of income from
treasured metallic gross sales from shopping for and promoting treasured metallic commodities for the
three months ended March 31, 2022.






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Gross Revenue and Gross Margin


For the three months ended March 31, 2022 and 2021 we realized gross revenue of
none and $3,080, respectively, representing a lower of $3,080 or 100%. The
gross revenue decreased in proportion to the income and prices of income associated
to the acquisition and sale of treasured metals as described above.


Working Bills


For the three months ended March 31, 2022 and 2021, we realized working
bills of $1,879,364 and $2,139,652, which represents a lower of $260,288,
or 12.16%. Our working bills decreased attributable to decreased skilled
service bills with regard to lowered operations in Viva Wealth Fund I, LLC,
together with gross sales and advertising expense primarily associated to the era of leads
and investor sourcing.



Different earnings and expense



For the three months ended March 31, 2022 and 2021, different earnings was $1,154,129
and $12,351,960, which represents a lower of $11,377,871, or 90.79%. The
lower in different earnings is especially attributed to unrealized good points of $1,239,566
and 12,683,444 on marketable securities, which represents a lower of
$11,443,878, or 90.23% in marketable securities. These securities have been accounted
for at a good worth primarily based on the quoted costs within the energetic markets and
fluctuate primarily based on market costs of the securities.


Provision for earnings tax


The Firm recorded an earnings tax provision of $800 and $1,020,388 for the
three months ended March 31, 2022 and 2021, respectively, representing a
lower of $1,019,588 or 99.92%. The efficient tax charge within the first quarter of
2022 was (0.04)% in comparison with 9.18% within the first quarter of final yr. The
distinction in efficient tax charge was primarily because of the lower in unrealized
good points on marketable securities for the three months ended March 31, 2022 and
2021.



Money flows



The next desk units forth the first sources and makes use of of money and money
equivalents for the three months ended March 31, 2022 and 2021 as introduced
under:



                                                     March 31,
                                               2022             2021

Internet money utilized in working actions $ (866,798 ) $ (1,290,642 )
Internet money utilized in investing actions (196,298 ) (457,334 )
Internet money supplied by financing actions 6,416,601 3,249,310

Liquidity and Capital Sources

We have now traditionally suffered web losses and cumulative unfavourable money flows from
operations and, as of March 31, 2022 and 2021, we had an collected deficit of
roughly $36.3 million and $35.7 million.






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As of March 31, 2022 and December 31, 2021, we had money and money equivalents of
$6,847,224 and $1,493,719, with $322,268 and $199,952 attributed to variable
curiosity entities, respectively.

Thus far we’ve got financed our operations primarily via debt financing,
personal fairness choices and our working curiosity agreements, though on
February 14, 2022, the Firm closed an underwritten public providing of
1,600,000 shares of frequent inventory, at a public providing worth of $5.00 per share,
for combination gross proceeds of $8.0 million, previous to deducting underwriting
reductions, commissions, and different providing bills. The Firm’s Frequent Inventory
started buying and selling on the Nasdaq Capital Market below the image “VIVK”.

For the three months ended March 31, 2022 and 2021, our web money utilized in
working actions was pushed by the consolidated web earnings (loss) of
($726,035) and 9,375,000, which change is especially attributed to unfavorable
adjustments available in the market which decreased unrealized good points on marketable securities
as described above.

For the three months ended March 31, 2022 and 2021, our web money utilized in
investing actions was primarily attributed to our buy of apparatus of
$206,298 and $427,374 associated to the manufacturing of our RPCs.

For the three months ended March 31, 2022 and 2021, our web money supplied by our
financing actions was primarily attributed to proceeds of $427,496 and
$3,250,774 associated to the issuance of convertible bridge notes and different loans,
and in 2022, proceeds of $6,240,000 from the February 14, 2022 underwritten
public providing of 1,600,000 shares of frequent inventory.

There aren’t any additional present agency obligations; nevertheless we anticipate additional
building prices of roughly $1 million in reference to our
building in technique of our RPCs.

Our capability to proceed to entry capital could possibly be affected adversely by numerous
components, together with basic market and different financial situations, rates of interest,
the notion of our potential future earnings and money distributions, any
unwillingness on the a part of lenders to make loans to us and any deterioration
within the monetary place of lenders that may make them unable to fulfill their
obligations to us. If we can’t generate or increase capital via scaled up
operations of our websites, or from additional public or personal debt financings,
fairness choices, or different means, our capability to develop our enterprise could also be
negatively affected.



Contractual Obligations



Our contractual obligations as of March 31, 2022 are for working lease
liabilities for workplace and warehouse house, which leases finish in 2025. Working
lease obligations as of March 31, 2022 are as follows:


2022    $ 266,370
2023      370,902
2024      304,892
2025       16,135
Whole   $ 958,299



Curiosity Price and Market Threat

Our financing preparations should not topic to variable rates of interest of the
prime charge or LIBOR.






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Inflation


Inflation usually will trigger suppliers to extend their charges. In connection
with such charge will increase, we might or might not be capable to enhance our pricing to
shoppers. Inflation might trigger each our funding and price of income to
enhance, thereby reducing our return on funding and miserable our gross
margins.

Off Steadiness Sheet Preparations


None.


Essential Accounting Insurance policies & Use of Estimates

There have been no materials adjustments to our vital accounting insurance policies and the
use of estimates from these disclosures reported within the Modification No. 1 to our
Annual Report on Type 10-Okay for the fiscal yr ended December 31, 2021 filed
with the Securities and Trade Fee on Might 2, 2022.

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