Vivakor signs term sheet for potential $23 million funding deal

DALLAS - Vivakor, Inc. (NASDAQ:VIVK), a provider of energy transportation, storage, reuse, and remediation services, announced Monday it has signed a non-binding term sheet that could provide up to $23 million in funding through the issuance of a new series of convertible preferred stock. The funding announcement comes at a critical time for the company, which according to InvestingPro data, has been facing significant cash burn challenges with a concerning current ratio of 0.22, indicating short-term obligations exceed liquid assets.

The proposed transaction with a non-affiliated counterparty would allocate $15 million in restricted cash to establish a credit facility for Vivakor’s crude oil marketing and trading activities, $3 million in unrestricted working capital, and at least $5 million in assets and facilities for the company’s remediation segment. With total debt of approximately $86 million and a debt-to-capital ratio of 87%, this funding could provide crucial financial flexibility.

Under the proposed terms, Vivakor would issue $25 million in Series B Convertible Preferred Stock, which would be convertible into common stock beginning one year after executing definitive agreements, with a maximum conversion price of $0.75 per share.

The deal includes a three-year exclusive commitment from the counterparty to use Vivakor’s trucking fleet in the Permian and Eagle Ford Basins, which the company expects would increase utilization across its transportation network.

"This proposed transaction would directly support two of our expanding business segments, crude oil marketing and remediation, while also driving additional volumes across our trucking fleet," said James Ballengee, Vivakor’s Chairman, President and CEO, in the press release.

The company has agreed to an exclusivity period with the third party through December 31, 2025, with a target closing date of year-end.

The announcement notes that the transaction is designed to accelerate growth in Vivakor’s crude oil marketing and remediation businesses while strengthening integration across its operations in key oil-producing regions. Despite challenging market conditions that have led to a 77% decline in stock price over the past year, InvestingPro analysis suggests the stock may be undervalued, trading at just 0.16 times book value. For deeper insights into Vivakor’s financial health and growth prospects, including 13 additional exclusive ProTips, visit InvestingPro.

In other recent news, Vivakor, Inc. announced a significant transaction involving the sale of two non-core business units, Meridian Equipment Leasing, LLC, and Equipment Transport, LLC. This move is expected to reduce the company’s debt by approximately $59 million, while providing net consideration of about $11 million. Additionally, Vivakor received a default notice from its lender, J.J. Astor & Co., concerning a junior secured convertible promissory note, with approximately $7.66 million now due. In another development, Vivakor has partnered with Neuralix, Inc. to implement artificial intelligence across its midstream energy operations, with plans to establish a joint venture by the end of 2025. The company also announced a special dividend to be paid on September 26, 2025, in the form of Adapti, Inc. shares. Furthermore, Vivakor has strengthened its leadership team by appointing Kimberly Hawley as Executive Vice President and Chief Financial Officer and Les Patterson as Executive Vice President and Chief Operating Officer. These recent developments highlight Vivakor’s strategic focus on streamlining operations and enhancing its financial position.

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