Vivakor, Inc. (NASDAQ:VIVK), a company specializing in refuse systems, announced on Monday that it has entered into a material definitive agreement and has seen unregistered sales of equity securities. The Nevada-incorporated firm, with its principal executive offices in Dallas, Texas, reported these developments in a recent SEC Form 8-K filing.
On August 22, 2024, Vivakor entered into a new executive employment agreement with its Vice President of Marketing. According to the agreement, the executive will receive an annual base salary of $200,000, which may increase to $350,000 after the first year if the company achieves a net profitability of $500,000 from commodity trades overseen by the Vice President. Additionally, the executive is eligible for up to $440,000 in annual incentive cash and equity compensation based on performance goals.
As part of the agreement, the Vice President of Marketing will also receive a one-time signing grant of company common stock valued at $150,000. The shares, calculated to be 71,090 based on the grant's effective date, have not yet been issued but are due within thirty days following the filing of an amended Registration Statement on Form S-8.
Furthermore, on September 9, 2024, Aldali Int'l for Gen. Trading & Cont. Co. (DIC) exercised a Non-Qualified Stock Option by using $1,179,000 owed to them under a promissory note. This transaction resulted in the acquisition of 1,000,000 shares of Vivakor's common stock. The shares, which were previously reserved and held under an irrevocable instruction letter by the company's transfer agent, were issued with a standard Rule 144 restrictive legend.
The issuance was exempt from registration under Section 4(a)(2) of the Securities Act, as the holder is considered a sophisticated investor with familiarity with the company's operations. Vivakor is currently reviewing the stock option exercise and share issuance to ensure compliance with the terms of its agreement with DIC.
The information disclosed is based on the SEC filing and provides insight into Vivakor's recent executive compensation agreements and stock option exercises.
In other recent news, Vivakor Inc. announced a delay in its planned merger with Empire Diversified Energy, Inc. to the first quarter of 2025, due to the recent acquisition of the Endeavor Entities. The merger will result in Empire becoming a wholly-owned subsidiary of Vivakor, with the issuance of 67,200,000 shares of Vivakor common stock as consideration.
In other developments, Vivakor has appointed Jeremy Gamboa as its Division President, Logistics, following the company's recent acquisitions in the midstream petroleum sector. The company has also completed the acquisition of Endeavor Crude, LLC, Meridian Equipment Leasing, LLC, Equipment Transport, LLC, and Silver Fuels Processing, LLC, along with their subsidiaries.
Financially, Vivakor has finalized the sale of 1,000,000 equity shares to E-Starts Money Co., resulting in a $500,000 capital injection. Additionally, the company has secured a $5 million equity line of credit from ClearThink Capital Partners (WA:CPAP), LLC, and sold 1.6 million common shares to investor James K. Granger.
Vivakor has also established a new business division, Vivakor Supply & Trading (VST), aimed at managing market risks and diversifying revenue streams. Lastly, the company has signed a new employment agreement with its CFO, Tyler Nelson, extending his tenure and adjusting his compensation package.
InvestingPro Insights
Vivakor's recent developments, including the new executive employment agreement and the exercise of stock options, should be viewed in the context of the company's current financial situation. According to InvestingPro data, Vivakor has a market capitalization of $48.74 million and has seen significant revenue growth, with a 19.06% increase in quarterly revenue as of Q2 2024. However, the company faces some financial challenges.
InvestingPro Tips highlight that Vivakor "operates with a significant debt burden" and "may have trouble making interest payments on debt." This is particularly relevant given the company's recent equity transactions and executive compensation agreements, as it suggests that the firm may be using equity to manage its financial obligations.
Despite these challenges, Vivakor has shown a "high return over the last year," with a one-year price total return of 109.09% as of the latest data. This positive stock performance contrasts with the company's operational struggles, as evidenced by its negative operating income margin of -14.17% for the last twelve months.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Vivakor, providing a deeper understanding of the company's financial health and market position.
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