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Related Party Transactions
 9 Months Ended
Sep. 30, 2025
Related Party Transactions [Abstract]  
Related Party Transactions

Note 10. Related Party Transactions

 

On August 1, 2022, the Company closed the transaction that was the subject of a Membership Interest Purchase Agreement (the “MIPA”), with Jorgan Development, LLC, (“Jorgan”) and JBAH Holdings, LLC, (“JBAH” and, together with Jorgan, the “Sellers”), as the equity holders of Silver Fuels Delhi, LLC (“SFD”) and White Claw Colorado City, LLC (“WCCC”) whereby, the consideration for the membership interests included the notes in the amount of $286,643 to JBAH and $28,377,641 to Jorgan, which accrued interest of prime plus 3% on the outstanding balance of the notes. In October 2022, the parties entered into an amendment to the Notes permitting a portion of the principal to be settled through the issuance of equity. Following shareholder approval in November 2023, the Company issued 7,042,254 restricted shares of its common stock as a $10,000,000 principal payment applied to the Notes on a pro rata basis.

 

Under the remaining terms of the Notes, the principal and accrued interest were payable monthly based on Monthly Free Cash Flow generated by SFD and WCCC, as defined in the MIPA. 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 connection with the Company’s divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC on July 30, 2025, the Company and Jorgan entered into an Amended and Restated Secured Promissory Note, effective that same date, which reduced the Company’s required monthly payment to Jorgan from 99% of Monthly Free Cash Flow to 50% of Monthly Free Cash Flow. All other material terms of the Notes remained unchanged. As of September 30, 2025 and December 31, 2024, the aggregate outstanding principal balance on the Notes issued to Jorgan was $3,469,245 and $18,109,503, respectively.

 

In the business combination which the Company acquired WCCC, the Company also assumed WCCC’s Oil Storage Agreement with White Claw Crude, LLC (“WC Crude”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under this agreement, WC Crude has the right, subject to the payment of service and maintenance fees, to store crude oil and other liquid hydrocarbons at a crude oil terminal operated by WCCC. WC Crude is required to pay a minimum fee of $150,000 per month, regardless of actual storage utilization. The agreement expires on December 31, 2031. The Company recognized related-party tank storage revenue of $1,350,000 for each of the nine-month periods ended September 30, 2025 and 2024.

 

In the business combination which the Company acquired SFD, the Company assumed an amended Crude Petroleum Supply Agreement (“Supply Agreement”) with White Claw Crude, LLC (“WC Crude”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under the Supply Agreement, WC Crude supplies SFD with a minimum of 1,000 sourced barrels per day. The agreement provides that if SFD does not realize a margin of at least $5.00 per barrel upon resale of these volumes, WC Crude will pay SFD a deficiency payment equal to the difference between the realized margin and $5.00 per barrel. Conversely, if SFD realizes a margin in excess of $5.00 per barrel, SFD is required to remit a profit-sharing payment to WC Crude equal to 10% of the excess margin, multiplied by the number of barrels sold. The Supply Agreement expires on December 31, 2031. For the three months ended September 30, 2025 and 2024, the Company recorded crude oil purchases from WC Crude of $0 and $10,092,987, respectively, and recognized deficiency payments of $637,000 and $661,186, respectively. For the nine months ended September 30, 2025 and 2024, the Company recorded crude oil purchases of $3,594,162 and $33,236,475, respectively, and recognized deficiency payments of $1,759,917 and $661,186, respectively. In addition, SFD has an agreement to sell natural gas liquids and crude petroleum products to WC Crude, which are cash-net-settled at market prices. The Company recognized related-party sales to WC Crude totaling $0 and $4,521,258 for the three months ended September 30, 2025 and 2024, respectively, and $1,585,306 and $9,599,740 for the nine months ended September 30, 2025 and 2024, respectively.

 

In the business combination which the Company acquired SFD and WCCC, the Company entered into a Shared Services Agreement with Endeavor Crude, LLC (“Endeavor”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under this agreement, the Company had the right, but not the obligation, to utilize Endeavor for consulting and related services. Following the Company’s acquisition of Endeavor, the agreement was eliminated upon consolidation. For the nine months ended September 30, 2025 and 2024, Endeavor rendered services totaling $0 and $596,341, respectively.

 

The Company has an outstanding note payable to Triple T, an entity owned by Dr. Khalid Bin Jabor Al Thani, the 51% majority owner of Vivakor Middle East LLC. The note is non-interest bearing, has no fixed maturity date, and is expected to be repaid from revenues generated by Vivakor Middle East LLC. As of September 30, 2025 and December 31, 2024, the outstanding balance on the note was $476,352 and $404,121, respectively.

 

Upon the closing of our acquisition of the Endeavor Entities on October 1, 2024, the Company assumed a Trucking Transportation Agreement and Addendum with White Claw Crude, LLC (“WC Crude”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under this agreement, WC Crude is required, through its own operations or by sourcing from third parties on the Company’s behalf, to provide a minimum of 75,000 barrels per day for the Company’s trucking logistics services. The agreement expires on December 31, 2034. For the nine months ended September 30, 2025, the Company recognized related-party trucking revenue of $7,083,004 under this agreement.

 

Upon the closing of our acquisition of the Endeavor Entities on October 1, 2024, the Company acquired a Station Throughput Agreement with Posse Wasson, LLC (Posse Monroe, LLC) (“Posse”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under the agreement, Posse is required to source a minimum of 230,000 barrels per month through the Company’s storage facility at a fee of $0.275 per barrel, which guarantees a minimum of $759,000 of annual throughput revenue. The agreement expires on December 31, 2034. For the three and nine months ended September 30, 2025, the Company recognized $189,750 and $569,250, respectively, in revenue under this related-party agreement.

 

Upon the closing of our acquisition of the Endeavor Entities on October 1, 2024, the Company acquired a Station Throughput Agreement with White Claw Crude, LLC (“WC Crude”), an entity that shares a common beneficiary, James H. Ballengee, with Jorgan Development, LLC and JBAH Holdings, LLC. Under the agreement, WC Crude is required to source a minimum of 200,000 barrels per month through the Company’s Omega Gathering Pipeline at a fee of $1.00 per barrel, which guarantees a minimum of $2,400,000 of annual throughput revenue. The agreement expires on December 31, 2034. For the three and nine months ended September 30, 2025, the Company recognized $461,196 and $1,268,402, respectively, in revenue under this related-party agreement.

 

On July 30, 2025, the Company and certain affiliated entities, together with a related party, entered into a Forbearance Agreement with Maxus Capital Group, LLC. The related party, who serves as an executive officer and significant shareholder of the Company, was included among the obligors to the agreement. The Forbearance Agreement acknowledged existing events of default and provided for revised payment terms through November 2025. In connection with the agreement, the Company paid a forbearance fee of $250,000 in cash and issued restricted common stock valued at $250,000. The transaction was conducted on terms negotiated with an unaffiliated third party (Maxus Capital Group, LLC), and management believes the terms were reasonable and consistent with those that could have been obtained from an independent party.

 

As previously disclosed, during the quarter ended September 30, 2025, the Company completed the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC, two wholly owned subsidiaries, pursuant to a Membership Interest Purchase Agreement dated July 30, 2025. Various related-party notes and obligations associated with the divestiture are discussed in Note 6 — Loans and Notes Payable and should be read in conjunction with this note.