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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 7. Commitments and Contingencies On February 11, 2025, we entered into a Consulting Agreement with WSGS, LLC for management consulting services. Under the terms of the Consulting Agreement, we will pay the consultant up to $1.3 million per year, payable in registered shares of our common stock under our 2023 Equity Incentive Plan. The Consulting Agreement is for an initial term of one year, with the option for a second year. The principal of WSGS, LLC is also a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that we entered into an Agreement and Plan of Merger with on February 26, 2024, but has not closed, and E-Starts Money Co., a Delaware corporation, which is an investor in our common stock. On February 10, 2025, we entered into a Side Letter related to our Executive Employment Agreement with our former Chief Financial Officer, Mr Nelson, originally dated June 13, 2024 and the Promissory Note issued to Mr. Nelson on the same date. The Side Letter amended and clarified Mr. Nelson’s Employment Agreement and the Promissory Note to: (i) clarify that effective October 1, 2024, Mr. Nelson’s Employment Agreement is with Vivakor Administration, LLC with all material obligations guaranteed by the Company, (ii) confirm that the Promissory Note remains a primary obligation of the Company; (iii) confirm that the Company’s payment obligations are triggered by fundraising by either the Company or its subsidiaries, extend the Promissory Note’s maturity date to June 30, 2025, and assess a 5% fee on the outstanding principal and interest due under the Promissory Note as of December 31, 2024 if the Promissory Note was not paid by that date, and (iv) to clarify that no taxable event will occur related to amounts due under the Promissory Note until those amounts are actually paid by the Company to Mr. Nelson. See Note 12 for additional information. On February 10, 2025, the Company entered into Amendment No. 1 to the Employment Agreement with Mr. Les Patterson, Vice President, Operations & Construction, correcting a drafting error regarding his annual equity compensation. As corrected, Mr. Patterson is entitled to annual equity compensation of not less than $100,000, payable quarterly, and received 74,701 unrestricted shares of common stock valued at $75,000 under the Company’s 2023 Equity and Incentive Plan. On August 12, 2025, the Company entered into Amendment No. 2 to Mr. Patterson’s Employment Agreement, promoting him to Executive Vice President and Chief Operating Officer and revising certain compensation and employment terms. Under the amended agreement, Mr. Patterson is entitled to an annual base salary of $375,000 and annual equity compensation of not less than $125,000, payable in four equal quarterly installments in shares of the Company’s common stock issued under its 2023 Equity and Incentive Plan. Mr. Patterson also received a one-time signing bonus of $250,000 in Company common stock, issued pursuant to the Company’s Form S-8 Registration Statement and priced based on the volume-weighted average trading price for the five NASDAQ trading days preceding the agreement date. The principal terms of this amendment, including the termination and severance provisions, were previously disclosed in the Company’s Current Report on Form 8-K filed August 12, 2025, which is incorporated herein by reference. On February 10, 2025, we entered into an Employment Agreement with Andre Johnson to be our Vice President, Human Resources As part of Mr. Johnson’s compensation we agreed to issue him 302,297 shares of our common stock as a signing bonus, as well as $75,000 worth of our common stock annually, paid in equal quarterly installments. These shares are due to be issued unrestricted under the Company’s 2023 Equity and Incentive Plan as registered on Form S-8. During the quarter ended September 30, 2025, the Company entered into a Forbearance Agreement with Maxus Capital Group, LLC in response to existing events of default under a financing arrangement previously used to acquire equipment. As part of the agreement, the Company paid a cash forbearance fee of $250,000 and committed to issue restricted common stock valued at $250,000. The revised terms of the arrangement required the Company to remeasure certain finance lease obligations associated with equipment financed through Maxus in accordance with ASC 842, Leases. The remeasurement resulted in adjustments to the related lease liabilities and right-of-use assets during the period. Other than the adjustments arising from the Maxus Forbearance Agreement, there were no material changes to the Company’s lease commitments or other contractual obligations during the three and nine months ended September 30, 2025. During the quarter ended September 30, 2025, the Company, in consultation with external counsel, concluded that certain legal matters were probable and that related losses were reasonably estimable under ASC 450-20. As a result, the Company recorded a legal reserve of $5.0 million, included within Accounts Payable and Accrued Expenses, compared to zero at December 31, 2024. The reserve primarily reflects three legal settlements substantially negotiated in the fourth quarter of 2025 (totaling approximately $3.86 million, a portion of which had been previously accrued) as well as three additional matters for which an unfavorable outcome is considered probable. The recorded amounts represent management’s best estimate of the Company’s probable loss, and at this time the Company does not believe additional losses beyond the amounts accrued are reasonably possible. Further detail is not provided because disclosure could prejudice the Company’s position in ongoing negotiations and proceedings.

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