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Vivakor, Inc. (REFUSE SYSTEMS [4953]), a Nevada-based company with a market capitalization of $35 million and current stock price of $0.80, has recently engaged in unregistered sales of equity securities, according to a Form 8-K filed with the SEC on May 20, 2025. According to InvestingPro analysis, the company currently shows signs of being slightly undervalued, though it faces significant operational challenges. The company, operating under the name 01 Energy & Transportation, issued convertible promissory notes to several accredited investors totaling $575,000 between May 14, 2025, and May 19, 2025. These notes were part of a Securities Purchase Agreement (SPA), which provided the company with $500,000 in funding.
The notes, which mature twelve months from the date of issuance, carry a 15% original issuance discount and a one-time ten percent interest charge applied at the issuance date. This new debt adds to Vivakor’s already significant leverage, with InvestingPro data showing a debt-to-equity ratio of 0.67 and a concerning current ratio of 0.11, indicating potential liquidity challenges. InvestingPro has identified several additional risk factors, with 8 more key insights available to subscribers. They are convertible at eighty percent of the lower of the closing price of Vivakor’s common stock on the trading day immediately prior to the conversion notice date, or the average of the four lowest VWAPs over the twenty trading days prior to the notice date. In addition to the notes, Vivakor issued 75,000 shares of common stock to the holders as an incentive to enter into the SPA and the Notes.
Furthermore, on May 20, 2025, Vivakor issued an aggregate of 1,764,964 shares of restricted common stock for three months of dividends to the holders of its Series A Preferred Stock. Notably, 1,384,311 shares were issued to Jorgan Development, LLC, and 13,983 shares to JBAH Holdings, LLC, both controlled by James Ballengee, Vivakor’s CEO.
The issuance of these securities was exempt from registration under Section 4(a)(2) of the Securities Act as the transactions involved accredited investors who are familiar with the company’s operations. The company has identified itself as an emerging growth company and has indicated by check mark that it has elected not to use the extended transition period for complying with new or revised financial accounting standards. Despite generating annual revenue of $89.81 million, the company operates with thin gross margins of just 11.38%, highlighting operational efficiency challenges that InvestingPro subscribers can analyze in detail through comprehensive financial metrics and peer comparisons.
The SPA and the Notes are referenced in full text as Exhibits 10.1 and 10.2, respectively, in the SEC filing. This report is based on information from the SEC filing by Vivakor, Inc.
In other recent news, Vivakor Inc. reported a projected annual revenue run-rate exceeding $160 million for 2024, marking the highest level of contracted revenue in the company’s history. This follows the acquisition of the Endeavor Entities, which has significantly expanded Vivakor’s oilfield services and is expected to contribute to sustainable earnings growth. Additionally, the company completed an expansion of its Omega Pipeline System in Oklahoma, which is anticipated to increase customer volumes. Vivakor also amended a loan agreement with Cedarview Capital Management, agreeing to a new repayment schedule and issuing 300,000 shares of restricted common stock as part of the arrangement.
Furthermore, Vivakor issued additional shares related to a convertible promissory note and the acquisition of the Endeavor Entities. The company also secured a $6.625 million convertible note with J.J. Astor & Co., aimed at enhancing working capital and repaying certain debts. This note is to be repaid in weekly installments, with potential conversion into common stock at a discount. Vivakor has reserved over 21.5 million shares for possible conversion under this agreement. The company is also addressing a Nasdaq deficiency notification related to its stock price, with a compliance deadline set for September 15, 2025.
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