Alien10

Yeah that lower gear  #1 seems to be out farther than the upper "fan" gear.  From the pic it would appear that #1's attaching bolt is spring loaded to force gear #1 into alignment with the upper fan gear.
Is there any room behind #1 gear to slide back into alignment with the upper fan gear?  If not, check to see if gear #1 will line up with the upper fan gear if you flip it around.  
I'd be a little careful with torque on that nut, it doesn't look very big.  If you can tighten it enough to get the gears aligned, you might try a drop of thread locker on its threads to keep it in place during use. 
Good luck.

I'm no expert, and live in Michigan. I think various states have their own laws, but most require standard UTV equipment plus emergency brake, horns, signals head lights and tail lights including running, brake and turn signals, and seat belts. 
There are sites to help by state.  Here is just one of them.
 https://www.dirtlegal.com/street-legal-utv-guide