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Loans and Notes Payable (Tables)
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Schedule of loans and notes payable
               
    December 31,  
    2023     2022  
Various promissory notes and convertible notes (a)   $ 50,960     $ 50,960  
Novus Capital Group LLC Note (b)     171,554       171,554  
National Buick GMC (c)     13,556       16,006  
Blue Ridge Bank (d)     410,200       410,200  
Small Business Administration (e)     299,900       299,900  
Al Dali International for Gen. Trading & Cont. Co. (f)     974,594       -  
RSF, LLC (g)     500,000       -  
Keke Mingo (h)     913,240       -  
Various variable interest promissory notes (i)     -       1,325,000  
Total notes payable   $ 3,334,004     $ 2,273,620  
                 
Loans and notes payable, current   $ 2,477,970     $ 542,374  
Loans and notes payable, current attributed to variable interest entity     -       1,325,000  
Loans and notes payable, long term   $ 856,034     $ 406,246  
Schedule of maturities of loans and notes payable
               
    December 31,  
    2023     2022  
Various variable interest promissory notes- related parties (i)   $ -     $ 899,500  
Jorgan Development, LLC (j)     20,841,052       27,977,704  
Triple T Notes (k)     375,124       342,830  
Total notes payable- related parties   $ 21,216,176     $ 29,220,034  
                 
Loans and notes payable, current- related parties   $ 15,626,168     $ 342,830  
Loans and notes payable, current attributed to variable interest entity- related parties     -       599,500  
Loans and notes payable attributed to variable interest entity- related parties     -       -  
Loans and notes payable, long term- related parties   $ 5,590,008     $ 28,277,704  

 

       
2024   $ 18,104,138  
2025     6,162,287  
2026     35,552  
2027     17,232  
2028     17,232  
Thereafter     213,740  
Total   $ 24,550,180  

 

 
(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.
(b) In 2017, the Company acquired assets, including 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. The debt currently accrues interest at 10% per annum. In November 2021, the lender agreed to extend the maturity of the note to April 1, 2022. On April 1, 2022, the lender agreed to extend the maturity of the note to April 1, 2023 with an initial payment of $52,448 and approximate monthly payment of $29,432 thereafter until the note is fully paid. As of the date of this report, this note encumbered our ammonia synthesis assets, which were sold in February 2024, and the Company was released by the lender from this liability.
(c) 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.
(d) In May 2020 and in January 2021, the Company entered into a Paycheck Protection Program (“PPP”) loan agreement for $205,100 for each loan with Blue Ridge Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program. The May 2020 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 18th month. The January 2021 loan carries an annual interest rate of one (1) percent per annum with payment beginning in the tenth month with monthly payments required until maturity in five years. The loans 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. We have applied for forgiveness under the CARES Act, however we currently believe a substantial portion of the loans may not be forgiven. The Company is working with the loan service agency to obtain forgiveness and any unforgiven amounts of the loans will be repaid in cash. The Company is not currently making payments on these loans.
(e) From May through August 2020, the Company entered into two 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.
(f) On June 20, 2023, we issued a 15% secured promissory note due to Al Dali International for Gen. Trading & Cont. Co., a company organized under the laws of Kuwait (“DIC”), in the principal amount of up to $1,950,000. As security to secure repayment of the Note, we issued DIC an option to purchase 1,000,000 shares of our common stock at an exercise price of $1.179 per share, which was recorded as a debt discount in the amount of $467,509, which is amortized to interest expense over the term of the agreement using the effective interest method. We also granted DIC a security interest in our Trial Remediation Processing Center (“RPC”) that is currently on-site at the DIC facility in Kuwait. We will repay the amounts due under the note from the operations of the RPC. In order to repay the amounts due under the note, we will pay $12 per ton of material we process from the amounts due to us until all amounts due under the note have been repaid.

 

(g) On July 25, 2023, RSF, LLC loaned the Company $500,000 under the terms of a 10% Convertible Promissory Note. Under the terms of the note, interest accrues at 10% per annum, and matures two years from the date of issuance. The note is convertible into shares of our common stock at $2.50 per share, unless such conversion would cause the investor to own more than 4.9% of our outstanding common stock.
(h)

On December 5, 2023, Vivakor, Inc. (the “Company”) received a loan from an individual lender in the principal amount of one million dollars ($1,000,000) and, in connection therewith, the Company (the “Loan”) and agreed to issue 100,000 restricted shares of the Company’s common stock, which was recorded as a debt discount in the amount of $93,990, which is amortized to interest expense over the term of the agreement using the effective interest method. The Loan bears interest at the rate of 10% per annum, matures on December 31, 2024, has been personally guaranteed by James Ballengee, the Company’s Chief Executive Officer. The lender is not a related party or affiliate of the Company.
(i) The balance of these various promissory notes are related to the special purchase vehicle, Viva Wealth Fund I, LLC (VWFI), which was deconsolidated in 2023. The 2022 balance primarily related to an offering up to $25,000,000 in convertible notes in a private offering, which was closed in 2023. As of December 31, 2022, VWFI raised $11,750,000 and converted $10,425,000 of this debt to VWFI LLC units. A convertible note automatically converted into the LLC units at the earlier of (i) the date that the Equipment is placed into quality control and testing or (ii) six months from the date of investment. The convertible notes accrued interest at 12% per annum and are paid quarterly. At the maturity date, remaining interest would be paid, at which time no further interest payments accrue. As of December 31, 2022, VWFI also entered into various master revolving notes outside of the offering: $599,500, from a related party of VWFI, which accrues 6% interest per annum, had a maturity date of October 11, 2023, where no payments are made prior to the maturity date unless at the option of the fund; $300,000, from a related party of VWFI, which accrued 5% interest per annum, had a maturity date of July 14, 2024, where no payments are made prior to the maturity date unless at the option of the fund. Any remaining notes related to VWFI were deconsolidated as of October 1, 2023.
(j) On August 1, 2022, we closed a Membership Interest Purchase Agreement, (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC (“JBAH”), as the equity holders of Silver Fuels Delhi, LLC (“SFD”) and White Claw Colorado City, LLC (“WCCC”) whereby, the Company acquired all of the issued and outstanding membership interests in each of SFD and WCCC, making SFD and WCCC wholly owned subsidiaries of the Company. The consideration for the membership interests included secured three-year promissory notes in the amount of $286,643 to JBAH and $28,377,641 to Jorgan, which accrue interest of prime plus 3% on the outstanding balance of the notes. Under the MIPA, the Company has committed to make a payment to Jorgan and JBAH on or before February 1, 2024 in the amounts of $16,306,754 to Jorgan and $164,715 to JBAH, whether in cash or unrestricted common stock. In the event of a breach of the terms of the notes, the sole and exclusive remedy of the holder of the notes will be to unwind the MIPA transaction. The principal amount of the notes, together with any and all accrued and unpaid interest thereon, will be paid on a monthly basis in an amount equal to the Monthly Free Cash Flow continuing thereafter on the twentieth (20th) calendar day of each calendar month thereafter. Monthly Free Cash Flow means cash proceeds received by SFD and WCCC from its operations minus any capital expenditures (including, but not limited to, maintenance capital expenditures and expenditures for personal protective equipment, additions to the land/current facilities and pipeline connections) and any payments on the lease obligations of SFD and WCCC. In October 2022, we entered into an agreement amending the notes issued as consideration in the MIPA, whereby, as soon as is practical, following the approval of the Company’s shareholders (which was obtained in November 2023), the Company issued 7,042,254 restricted shares of the Company’s Common Stock (the “Exchange Shares”) in exchange for the forgiveness and cancellation of $10,000,000 of principal (the “Cancelled Debt Principal”) under the Note, reflecting a conversion price of $1.42 per share (the “Exchange”). The Company’s shareholders approved the Exchange and the Exchange Shares were issued on November 10, 2023 (the “Exchange Date”). As of the Exchange Date, the Exchange Shares had a fair value of approximately $5.6 million. The Exchange was accounted for as a troubled debt restructuring under ASC 470 – Debt (“ASC 470”), as (i) the Company was determined be experiencing financial difficulties as defined by ASC 470-60, and (ii) the Cancelled Debt Principal exceeded the fair value of the Exchange Shares by approximately $4.4 million, resulting in a lower effective borrowing rate on the Note as a result of the Exchange, and thus the Exchange was determined to result in a concession by the Lender. The Company performed a comparison of the undiscounted cash flows associated with the Note subsequent to the Exchange to the carrying value of the Note as of the Exchange date. The net carrying value of the Note was determined to exceed the undiscounted future cash flows by approximately $1.2 million (the “Excess Carrying Value”). The Note was thus written down to the amount of the undiscounted future cash flows on the Note from the Exchange Date to maturity. Further, as the Lender is a related party of the Company, the Excess Carrying Value was accounted for as a capital transaction and no gain or loss was recognized related to the restructuring. Once the registration statement is declared effective by the SEC, the note payment will count against the threshold payment amount, as defined in the notes and the MIPA, and no other material terms of the original note were changed as a result of the conversion. For the year ended December 31, 2023 and 2022, the Company made cash payments of $470,160 and $399,932 in principal and $3,117,826 and $872,404 in interest to Jorgan. For the year ended December 31, 2022, the Company made cash payments of $286,643 in principal and $6,111 in interest to JBAH paying this note off in full.
(k) The balance of this note is due to a related party, a company owned by the 51% owner of Vivakor Middle East LLC. The loan was granted to Vivakor Middle East LLC by the majority owner for operational use. On March 10, 2021, the Company entered into a master revolving note with Triple T Trading Company LLC to set forth the relationship of the parties to retain the previous terms of the note payable to Triple T Trading Company LLC, to include a note maturity of March 10, 2023 (which was extended to March 10, 2025 and maximum lending amount of 1,481,482 QAR or approximately $400,000, valued at an exchange rate of approximately $0.27 per QAR on December 31, 2023. Subsequent to December 31, 2023, the parties agreed to extend the maturity date of the loan to March 10, 2025.
Schedule of maturities of loans and notes payable
       
2024   $ 18,104,138  
2025     6,162,287  
2026     35,552  
2027     17,232  
2028     17,232  
Thereafter     213,740  
Total   $ 24,550,180  

 

 
(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.
(b) In 2017, the Company acquired assets, including 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. The debt currently accrues interest at 10% per annum. In November 2021, the lender agreed to extend the maturity of the note to April 1, 2022. On April 1, 2022, the lender agreed to extend the maturity of the note to April 1, 2023 with an initial payment of $52,448 and approximate monthly payment of $29,432 thereafter until the note is fully paid. As of the date of this report, this note encumbered our ammonia synthesis assets, which were sold in February 2024, and the Company was released by the lender from this liability.
(c) 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.
(d) In May 2020 and in January 2021, the Company entered into a Paycheck Protection Program (“PPP”) loan agreement for $205,100 for each loan with Blue Ridge Bank, subject to the Small Business Administration’s (“SBA”) Paycheck Protection Program. The May 2020 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 18th month. The January 2021 loan carries an annual interest rate of one (1) percent per annum with payment beginning in the tenth month with monthly payments required until maturity in five years. The loans 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. We have applied for forgiveness under the CARES Act, however we currently believe a substantial portion of the loans may not be forgiven. The Company is working with the loan service agency to obtain forgiveness and any unforgiven amounts of the loans will be repaid in cash. The Company is not currently making payments on these loans.
(e) From May through August 2020, the Company entered into two 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.
(f) On June 20, 2023, we issued a 15% secured promissory note due to Al Dali International for Gen. Trading & Cont. Co., a company organized under the laws of Kuwait (“DIC”), in the principal amount of up to $1,950,000. As security to secure repayment of the Note, we issued DIC an option to purchase 1,000,000 shares of our common stock at an exercise price of $1.179 per share, which was recorded as a debt discount in the amount of $467,509, which is amortized to interest expense over the term of the agreement using the effective interest method. We also granted DIC a security interest in our Trial Remediation Processing Center (“RPC”) that is currently on-site at the DIC facility in Kuwait. We will repay the amounts due under the note from the operations of the RPC. In order to repay the amounts due under the note, we will pay $12 per ton of material we process from the amounts due to us until all amounts due under the note have been repaid.

 

(g) On July 25, 2023, RSF, LLC loaned the Company $500,000 under the terms of a 10% Convertible Promissory Note. Under the terms of the note, interest accrues at 10% per annum, and matures two years from the date of issuance. The note is convertible into shares of our common stock at $2.50 per share, unless such conversion would cause the investor to own more than 4.9% of our outstanding common stock.
(h)

On December 5, 2023, Vivakor, Inc. (the “Company”) received a loan from an individual lender in the principal amount of one million dollars ($1,000,000) and, in connection therewith, the Company (the “Loan”) and agreed to issue 100,000 restricted shares of the Company’s common stock, which was recorded as a debt discount in the amount of $93,990, which is amortized to interest expense over the term of the agreement using the effective interest method. The Loan bears interest at the rate of 10% per annum, matures on December 31, 2024, has been personally guaranteed by James Ballengee, the Company’s Chief Executive Officer. The lender is not a related party or affiliate of the Company.
(i) The balance of these various promissory notes are related to the special purchase vehicle, Viva Wealth Fund I, LLC (VWFI), which was deconsolidated in 2023. The 2022 balance primarily related to an offering up to $25,000,000 in convertible notes in a private offering, which was closed in 2023. As of December 31, 2022, VWFI raised $11,750,000 and converted $10,425,000 of this debt to VWFI LLC units. A convertible note automatically converted into the LLC units at the earlier of (i) the date that the Equipment is placed into quality control and testing or (ii) six months from the date of investment. The convertible notes accrued interest at 12% per annum and are paid quarterly. At the maturity date, remaining interest would be paid, at which time no further interest payments accrue. As of December 31, 2022, VWFI also entered into various master revolving notes outside of the offering: $599,500, from a related party of VWFI, which accrues 6% interest per annum, had a maturity date of October 11, 2023, where no payments are made prior to the maturity date unless at the option of the fund; $300,000, from a related party of VWFI, which accrued 5% interest per annum, had a maturity date of July 14, 2024, where no payments are made prior to the maturity date unless at the option of the fund. Any remaining notes related to VWFI were deconsolidated as of October 1, 2023.
(j) On August 1, 2022, we closed a Membership Interest Purchase Agreement, (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC (“JBAH”), as the equity holders of Silver Fuels Delhi, LLC (“SFD”) and White Claw Colorado City, LLC (“WCCC”) whereby, the Company acquired all of the issued and outstanding membership interests in each of SFD and WCCC, making SFD and WCCC wholly owned subsidiaries of the Company. The consideration for the membership interests included secured three-year promissory notes in the amount of $286,643 to JBAH and $28,377,641 to Jorgan, which accrue interest of prime plus 3% on the outstanding balance of the notes. Under the MIPA, the Company has committed to make a payment to Jorgan and JBAH on or before February 1, 2024 in the amounts of $16,306,754 to Jorgan and $164,715 to JBAH, whether in cash or unrestricted common stock. In the event of a breach of the terms of the notes, the sole and exclusive remedy of the holder of the notes will be to unwind the MIPA transaction. The principal amount of the notes, together with any and all accrued and unpaid interest thereon, will be paid on a monthly basis in an amount equal to the Monthly Free Cash Flow continuing thereafter on the twentieth (20th) calendar day of each calendar month thereafter. Monthly Free Cash Flow means cash proceeds received by SFD and WCCC from its operations minus any capital expenditures (including, but not limited to, maintenance capital expenditures and expenditures for personal protective equipment, additions to the land/current facilities and pipeline connections) and any payments on the lease obligations of SFD and WCCC. In October 2022, we entered into an agreement amending the notes issued as consideration in the MIPA, whereby, as soon as is practical, following the approval of the Company’s shareholders (which was obtained in November 2023), the Company issued 7,042,254 restricted shares of the Company’s Common Stock (the “Exchange Shares”) in exchange for the forgiveness and cancellation of $10,000,000 of principal (the “Cancelled Debt Principal”) under the Note, reflecting a conversion price of $1.42 per share (the “Exchange”). The Company’s shareholders approved the Exchange and the Exchange Shares were issued on November 10, 2023 (the “Exchange Date”). As of the Exchange Date, the Exchange Shares had a fair value of approximately $5.6 million. The Exchange was accounted for as a troubled debt restructuring under ASC 470 – Debt (“ASC 470”), as (i) the Company was determined be experiencing financial difficulties as defined by ASC 470-60, and (ii) the Cancelled Debt Principal exceeded the fair value of the Exchange Shares by approximately $4.4 million, resulting in a lower effective borrowing rate on the Note as a result of the Exchange, and thus the Exchange was determined to result in a concession by the Lender. The Company performed a comparison of the undiscounted cash flows associated with the Note subsequent to the Exchange to the carrying value of the Note as of the Exchange date. The net carrying value of the Note was determined to exceed the undiscounted future cash flows by approximately $1.2 million (the “Excess Carrying Value”). The Note was thus written down to the amount of the undiscounted future cash flows on the Note from the Exchange Date to maturity. Further, as the Lender is a related party of the Company, the Excess Carrying Value was accounted for as a capital transaction and no gain or loss was recognized related to the restructuring. Once the registration statement is declared effective by the SEC, the note payment will count against the threshold payment amount, as defined in the notes and the MIPA, and no other material terms of the original note were changed as a result of the conversion. For the year ended December 31, 2023 and 2022, the Company made cash payments of $470,160 and $399,932 in principal and $3,117,826 and $872,404 in interest to Jorgan. For the year ended December 31, 2022, the Company made cash payments of $286,643 in principal and $6,111 in interest to JBAH paying this note off in full.
(k) The balance of this note is due to a related party, a company owned by the 51% owner of Vivakor Middle East LLC. The loan was granted to Vivakor Middle East LLC by the majority owner for operational use. On March 10, 2021, the Company entered into a master revolving note with Triple T Trading Company LLC to set forth the relationship of the parties to retain the previous terms of the note payable to Triple T Trading Company LLC, to include a note maturity of March 10, 2023 (which was extended to March 10, 2025 and maximum lending amount of 1,481,482 QAR or approximately $400,000, valued at an exchange rate of approximately $0.27 per QAR on December 31, 2023. Subsequent to December 31, 2023, the parties agreed to extend the maturity date of the loan to March 10, 2025.