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Vivakor , Inc. (NASDAQ:VIVK), a company specializing in refuse systems, has entered into a material definitive agreement by securing a $6.625 million junior secured convertible promissory note with J.J. Astor & Co., as announced on Monday. The note issuance is part of a larger Loan and Security Agreement aimed at bolstering the company’s working capital and repaying certain debts.
The Nevada-based company, headquartered in Dallas, TX, received $5 million before closing fees on Tuesday, with the intent to enhance general working capital and manage existing financial obligations. This funding comes at a critical time, as InvestingPro data shows the company’s current ratio stands at just 0.1, indicating significant liquidity challenges. InvestingPro subscribers have access to 7 additional key insights about Vivakor’s financial health. The convertible note, which does not accrue interest unless default occurs, is to be repaid in 42 weekly installments of $157,739. These payments can be made either in cash or, subject to SEC approval of a relevant registration statement, in Vivakor’s common stock at a 20% discount to the market price.
Vivakor has reserved over 21.5 million shares for potential conversion under the note and will issue 250,000 shares as additional loan consideration to J.J. Astor & Co. Furthermore, the company is obligated to file a resale registration statement for any common stock shares issuable under the note and the additional shares within 60 days post-closing, as per the Registration Rights Agreement (RRA).
Concurrently, Vivakor disclosed receiving a deficiency notification from the Nasdaq Stock Market due to the company’s stock price closing below the $1.00 minimum bid price for 30 consecutive business days. The company now has until September 15, 2025, to regain compliance with Nasdaq’s minimum bid price requirement. The stock has experienced significant pressure, with InvestingPro data showing a steep 48.4% decline over the past six months, while trading at $0.90, significantly below its 52-week high of $3.45. During this period, the company will actively monitor its stock price and consider options to address the listing deficiency.
This financial maneuver is executed under exemptions from registration provided by Section 4(a)(2) of the Securities Act, as the securities were issued to an executive officer of Vivakor with intimate knowledge of the company’s operations. The details of these corporate actions are sourced from a press release statement and Vivakor’s recent SEC filings.
In other recent news, Vivakor, Inc. has made significant strides in its business operations and corporate structure. The company recently disclosed in an 8-K filing that it issued equity as part of its expansion strategy, following the acquisition of the Endeavor Entities. This included the issuance of common and preferred stock shares, with the preferred stock offering a 6% annual dividend. In another corporate action, Vivakor amended its Articles of Incorporation to eliminate all previously designated series of preferred stock, as filed with the Nevada Secretary of State. This move leaves the company with 15 million authorized but undesignated preferred shares.
Additionally, Vivakor’s shareholders elected five board members and ratified Urish Popeck & Co., LLC as the independent registered public accounting firm for the upcoming fiscal year. The company also reported that a non-binding advisory vote on executive compensation passed during its annual meeting. In a strategic move, Vivakor signed a consulting agreement with WSGS, LLC to aid in managing new business operations post-acquisition, involving a payment of up to $1.3 million per year in registered common stock shares. These developments reflect Vivakor’s ongoing efforts to manage its expanding business operations and align its corporate governance practices.
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