Vivakor issues equity as part of expansion strategy

Vivakor , Inc. (NASDAQ:VIVK), a $28 million market cap company specializing in refuse systems, has entered into several agreements that have led to unregistered sales of equity securities, according to an 8-K filing with the SEC. The company, which generated nearly $62 million in revenue over the last twelve months, is working to manage its expanding business operations following the acquisition of the Endeavor Entities. InvestingPro analysis indicates the company is currently trading below its Fair Value.

On Monday, Vivakor signed a Consulting Agreement with WSGS, LLC to aid in managing new business operations post-acquisition. The one-year agreement, with an option for a second year, involves a payment of up to $1.3 million per year in registered common stock shares.

Additionally, a Side Letter was entered into on Sunday, February 10, 2025, amending and clarifying the employment agreement and promissory note with Tyler Nelson, Vivakor's CFO. The Side Letter extends the promissory note's maturity date to June 30, 2025, and includes a 5% fee on outstanding principal and interest due as of December 31, 2024. According to InvestingPro data, the company operates with a debt-to-equity ratio of 2.04 and a concerning current ratio of 0.1, suggesting potential liquidity challenges. InvestingPro subscribers have access to 10+ additional financial health indicators.

Furthermore, on February 1, 2025, Vivakor Administration, LLC, a subsidiary of Vivakor, established an Employment Agreement with Andre Johnson to serve as Vice President of Human Resources. The agreement includes an annual salary of $200,000 starting January 1, 2025, equity compensation, and a one-time signing bonus in common stock shares.

The 8-K filing also disclosed the issuance of 24,291 common stock shares and 56,880 Series A Preferred Stock shares to the sellers of the Endeavor Entities as part of the acquisition purchase price. The Preferred Stock carries a 6% annual dividend, payable in common stock shares, and can be converted to common stock at the company's discretion.

In addition to these transactions, Vivakor issued 139,535 shares to ClearThink Capital for the settlement of outstanding invoices and granted shares to executives as part of compensation agreements.

The filing also announced the filing of a Certificate of Designation for Series A Preferred Stock with the Nevada Secretary of State on February 11, 2025, outlining the rights and preferences of the stock.

These strategic moves are part of Vivakor's broader plan to solidify its position and manage its growing portfolio of businesses, though the company faces challenges with a weak gross profit margin of 7.5% and negative EBITDA of $5.33 million in the last twelve months. The information reported is based on the company's SEC filing and financial metrics from InvestingPro, which provides comprehensive financial analysis and real-time valuations for informed investment decisions.

In other recent news, Vivakor, Inc. has made several notable moves impacting its capital structure and corporate governance. The company recently amended its Articles of Incorporation to withdraw all previously designated series of preferred stock, leaving 15 million shares of preferred stock authorized but undesignated. Meanwhile, Vivakor's shareholders elected a five-member board and ratified Urish Popeck & Co., LLC as their independent registered public accounting firm during their annual meeting.

In terms of acquisitions, Vivakor issued equity securities to acquire Endeavor Entities, a group of companies involved in the energy and transportation sectors. The purchase price for this significant acquisition was structured in a combination of Vivakor common stock and Series A Preferred Stock. Additionally, Vivakor has entered into a new executive employment agreement with its Vice President of Marketing, including the issuance of company common stock valued at $150,000 as part of the compensation package.

These developments highlight Vivakor's recent strategic decisions and adjustments to its capital structure and corporate governance. The company's actions aim to align with regulatory requirements and corporate governance practices while expanding its footprint in the energy and transportation market. As these are recent developments, the implications for shareholders and potential investors are yet to be fully observed.

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